SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_________________
February 1, 1999
(Date of earliest event reported)
BROAD NATIONAL BANCORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 0-16637 22-2395057
(State or other jurisdiction (Commission File (IRS employer
of incorporation) Number) identification
number)
905 Broad Street, Newark, New Jersey 07102
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:(973) 624-2300
None
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
On February 1, 1999, Broad National Bancorporation, a New
Jersey corporation ("Broad"), entered into an Agreement and Plan
of Merger (the "Merger Agreement") by and between Independence
Community Bank Corp., a Delaware corporation ("ICBC"), and Broad,
a copy of which is attached hereto as Exhibit 2.1. The Merger
Agreement provides, among other things, that Broad will be merged
with and into ICBC, with ICBC being the surviving corporation
(the "Merger").
Pursuant to the Merger Agreement, each share of common stock
of Broad, par value $1.00 per share ("Broad Common Stock"),
issued and outstanding at the Effective Time (as defined in the
Merger Agreement) of the Merger (other than (i) shares of Broad
Common Stock held in treasury, (ii) unallocated and/or unvested
shares of Broad Common Stock held in Broad's Long-Term Capital
Accumulation Plan, and (iii) shares of Broad Common Stock held
directly or indirectly by ICBC or Broad or any of their
respective subsidiaries (not to include certain of such shares as
set forth in the Merger Agreement) (collectively, the "Excluded
Shares"), which Excluded Shares shall be canceled and cease to
exist and no consideration shall be delivered in exchange
therefor) will be converted into the right to receive either cash
or shares of ICBC's common stock, par value $0.01 per share
("ICBC Common Stock"), at the election of the holder thereof.
Broad's stockholders may be eligible to receive a combination of
cash and ICBC Common Stock in exchange for their shares of Broad
Common Stock, but the aggregate Merger Consideration (as defined
in the Merger Agreement) distributable by ICBC will consist of
approximately 50% cash and 50% ICBC Common Stock, subject to
adjustment as described below. The cash and ICBC Common Stock
distributable by ICBC will be determined based on an exchange
ratio in which Broad Common Stock is valued at $26.50 per share
if the Average Closing Price (as defined below) for ICBC Common
Stock is between $12.75 and $17.25 per share. If ICBC's Average
Closing Price is less than $12.75 per share, then Broad's
stockholders will receive the Merger Consideration based on an
exchange ratio of 2.0784 shares of ICBC Common Stock for each
share of Broad Common Stock. Conversely, if ICBC's Average
Closing Price is greater than $17.25 per share, then Broad's
stockholders will receive the Merger Consideration based on an
exchange ratio of 1.5362 shares of ICBC Common Stock for each
share of Broad Common Stock. The Average Closing Price for ICBC
Common Stock will be the average of the reported closing sale
prices per share during the Pricing Period (which consists of the
ten consecutive trading days during which ICBC Common Stock is
traded on the Nasdaq National Market System ending on the tenth
business day immediately prior to the anticipated Effective Time
of the Merger). The Merger Agreement contains customary anti-
dilution provisions.
In the event that ICBC's Average Closing Price is more than
$17.25 per share or less than $12.75 per share, the per share
Merger Consideration may be less or more than $26.50 per share.
If the Average Closing Price is less than $12.75 per share, the
cash portion of the Merger Consideration may exceed 50% of the
total Merger Consideration. In addition, if the Average Closing
Price is greater than $17.25 per share, the cash portion of the
Merger Consideration may be less than 50% of the total amount.
The total cash consideration may be decreased and the stock
consideration increased in the event that in the opinion of
counsel for ICBC or Broad such change <PAGE> is necessary in order for
such counsel to be able to render an opinion that the Merger will
qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code.
In the event that the Broad stockholders elect to receive
cash exceeding the aggregate amount of cash available in the
transaction, additional shares of ICBC Common Stock in lieu of
cash may be allocated to such stockholders on a pro rata basis.
Conversely, if Broad stockholders elect to receive ICBC Common
Stock in an amount in excess of the amount of stock available in
the transaction, such stockholders may be paid cash in lieu of
stock on a pro rata basis. To the extent possible, stockholders
who express no preference between cash and stock or failed to
file an election will be allocated ICBC Common Stock or cash in
such a manner as to avoid or minimize adjustments in the type of
consideration requested by those stockholders who do file an
election.
Each of Broad and ICBC have made certain representations and
warranties to the other in the Merger Agreement as to, among
other things, the authorization, validity, binding effect and
enforceability of the Merger Agreement, various corporate
matters, capital structure, consents and approvals, regulatory
reports, financial statements, certain fees payable in
connection with the Merger, the absence of material adverse
changes, the absence of certain legal proceedings, taxes,
employee benefit plans, compliance with applicable law,
agreements with regulatory agencies, environmental matters, loan
portfolio and property. Broad has also made certain
representations and warranties to ICBC with respect to among
other things, its material contracts, the inapplicability of
antitakeover provisions, its insurance, its investment securities
and borrowings, and certain other matters. ICBC has also made
representations and warranties to Broad with respect to the
shares of ICBC Common Stock to be issued in connection with the
Merger.
Pursuant to the Merger Agreement, during the period from the
date of the Merger Agreement to the Effective Time, each of Broad
and ICBC has agreed to use commercially reasonable efforts to,
and shall cause each of its respective subsidiaries to use
commercially reasonable efforts to (i) conduct its business in
the ordinary and usual course consistent with past practices and
prudent banking practice; (ii) maintain and preserve intact its
business organization, properties, leases, employees and
advantageous business relationships and retain the services of
its officers and key employees, (iii) take no action which would
adversely affect or delay the ability of Broad, Broad National
Bank (the Company's wholly owned subsidiary), ICBC or
Independence Community Bank (ICBC's wholly owned subsidiary) to
perform its covenants and agreements on a timely basis under the
Merger Agreement, and (iv) take no action which would adversely
affect or delay the ability of the Company, the Broad National
Bank, ICBC or Independence Community Bank to obtain any necessary
approvals, consents or waivers of any governmental authority
required for the transactions contemplated thereby or which would
reasonably be expected to result in any such approvals, consents
or waivers containing any material condition or restriction. The
Company has agreed to also not take certain actions with respect
to its operations including, among other things, not paying
dividends in excess of its normal quarterly rate, not issuing
shares of Broad Common Stock except as result of the exercise of
existing options granted under Broad's option plans and not
amending its certificate of incorporation or bylaws.
<PAGE>
The Merger Agreement can be terminated for various reasons,
including, among others, by the mutual written consent of the
parties or by either party if the other party has materially
breached its covenants, agreement, representations or warranties,
which breach cannot be cured within 30 days after notice thereof,
or by either party upon the occurrence or nonoccurrence of
certain other conditions or actions as set forth in the Merger
Agreement. Broad also may terminate the Merger Agreement if
during the four-business day period commencing on the first day
after the end of the Pricing Period (which consists of the ten
consecutive trading days during which ICBC Common Stock is traded
on the Nasdaq National Market System ending on the tenth business
day immediately prior to the anticipated Effective Date of the
Merger) it so notifies ICBC and both of the following conditions
are applicable:
(i) the product of the Average Closing Price and the Final
Exchange Ratio (as defined in the Merger Agreement) is
less than $24.00; and
(ii) the ICBC Ratio (the Average Closing Price divided by
$15.00, the per share closing price of ICBC Common
Stock on January 29, 1999, the last trading day
immediately preceding the date of the first public
announcement of the Agreement (the "Starting Price"))
is less than (x) the number obtained by dividing the
average daily per share closing prices of the common
stocks of 21 publicly-traded bank and thrift holding
companies (the "Index Group") during the Pricing Period
(the "Final Index Price") by the weighted average per
share closing prices of the common stocks of each
company comprising the Index Group on January 29, 1999,
the last trading day immediately preceding the date of
the first public announcement of the Agreement (the
"Initial Index Price"), less (y) 0.15 (the Index
Ratio").
If both of the foregoing conditions are applicable, Broad has the
right to terminate the Agreement; provided, however, in such
event ICBC shall have the option to increase the consideration to
be received by holders of Broad Common Stock thereunder, by
adjusting the Final Exchange Ratio to equal the lesser of (x) a
number obtained by dividing (A) $24.00 by (B) the Average Closing
Price, and (y) a number obtained by substituting the Adjusted
Preliminary Stock Ratio (1.0 plus the Index Ratio less the ICBC
Ratio, with the net sum being multiplied by the Preliminary Stock
Ratio then in effect as provided by the terms of the Merger
Agreement). If ICBC increases the Final Exchange Ratio as set
forth above, the Merger Agreement will not be terminated.
The Merger Agreement prohibits Broad and its subsidiaries
and representatives from initiating, soliciting or encouraging
inquiries, proposals or offers from, participating in discussions
or negotiations with, or providing confidential information to,
third parties concerning a merger, consolidation or similar
transaction involving, or any purchase, lease or other
acquisition of 10% or more of the assets or any equity securities
of, Broad or any of its subsidiaries (an "Acquisition Proposal").
Broad is, however, permitted to participate in discussions or
negotiations with, or provide confidential information or data
to, third parties who have made an unsolicited bona fide written
Acquisition Proposal if and only to the extent that (i) the Board
of Directors of Broad, based upon written advice of outside legal
counsel, in good faith deems such action to be legally necessary
<PAGE>
for the proper discharge of its fiduciary duties under applicable
law, and (ii) the Board of Directors of Broad determines in good
faith (based upon written advice of its financial advisor) that
such Acquisition Proposal, if accepted, is reasonably likely to
be consummated, taking into account all legal, financial and
regulatory aspects of the Acquisition Proposal and the person
making the Acquisition Proposal and would, if consummated, result
in a more favorable transaction than the transaction contemplated
by the Merger Agreement.
The Merger Agreement provides that if (i) Broad enters into
an agreement to engage in a merger, consolidation or similar
transaction involving, or any purchase, lease or other
acquisition of 10% or more of the assets or 15% or more of the
voting power of, Broad or any of its subsidiaries, (ii) Broad's
Board of Directors recommends that the stockholders of Broad
approve or accept any such transaction, or (iii) Broad or any of
its subsidiaries or certain of its affiliates engage in certain
other transactions or certain other events occur as set forth in
the Merger Agreement, Broad is required to pay ICBC a termination
fee of up to $6.5 million.
Consummation of the Merger is subject to the satisfaction of
certain conditions, including approval of the shareholders of
Broad and approval of the appropriate regulatory agencies.
Concurrently with the execution and delivery of the Merger
Agreement, the directors and certain executive officers of Broad
entered into a Stockholder Agreement with the Company pursuant
which, among other things, such persons agreed to vote their
shares of Broad Common Stock in favor of the Merger.
This Current Report on Form 8-K may contain certain
forward-looking statements regarding the Company's acquisition of
Broad, including cost savings to be realized, earnings accretion,
transaction charges and other opportunities following the
acquisition which are based on management's current expectations
regarding economic, legislative and regulatory issues. The
factors which may cause future results to vary materially
include, but are not limited to, general economic conditions,
changes in interest rates, deposit flows, loan demand, real
estate values, and competition; changes in accounting principles,
policies, or guidelines; changes in legislation or regulation;
and other economic, competitive, governmental, regulatory, and
technological factors affecting each company's operations,
pricing, products and services.
The Company and Broad publicly announced the Merger in a
press release dated February 1, 1999, a copy of which is attached
hereto as Exhibit 99.1.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The following Exhibits are filed as part of this
report:
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of
February 1, 1999, between Independence
Community Bank Corp. and Broad National
Bancorporation.
99.1 Press Release issued on February 1, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
BROAD NATIONAL BANCORPORATION
By: /s/ James Boyle
James Boyle
Treasurer
Dated: February 8, 1999
<PAGE>
EXHIBIT INDEX
Exhibit Description
2.1 Agreement and Plan of Merger, dated as of February
1, 1999, between Independence Community Bank Corp.
and Broad National Bancorporation.
99.1 Press Release issued on February 1, 1999.
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
INDEPENDENCE COMMUNITY BANK CORP.
AND
BROAD NATIONAL BANCORPORATION
DATED AS OF FEBRUARY 1, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE MERGER
PAGE
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Conversion of Company Common Stock. . . . . . . . . . . . . . . . 2
1.5 Election Procedures . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.7 ICBC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 8
1.8 Tax Opinion Adjustment. . . . . . . . . . . . . . . . . . . . . . 8
1.9 Certificate of Incorporation. . . . . . . . . . . . . . . . . . . 8
1.10 Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.11 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . 8
1.12 Tax Consequences. . . . . . . . . . . . . . . . . . . . . . . . . 9
1.13 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.14 Modification of Structure . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II
EXCHANGE OF SHARES
2.1 ICBC to Make Shares Available . . . . . . . . . . . . . . . . . . 9
2.2 Exchange of Shares. . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
DISCLOSURE SCHEDULES; STANDARDS FOR
REPRESENTATIONS AND WARRANTIES
3.1 Disclosure Schedules. . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Corporate Organization. . . . . . . . . . . . . . . . . . . . . . 13
4.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Authority; No Violation . . . . . . . . . . . . . . . . . . . . . 14
4.4 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . 16
4.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
4.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 16
4.7 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . . 17
4.9 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 18
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.11 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.12 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.13 Company Information . . . . . . . . . . . . . . . . . . . . . . . 21
4.14 Compliance with Applicable Law. . . . . . . . . . . . . . . . . . 21
4.15 Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . 21
4.16 Agreements with Regulatory Agencies . . . . . . . . . . . . . . . 22
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 22
4.18 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.19 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.20 Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.21 Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.22 Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.23 Antitakeover Provisions Inapplicable. . . . . . . . . . . . . . . 25
4.24 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.25 Investment Securities; Borrowings; Deposits . . . . . . . . . . . 25
4.26 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.27 Year 2000 Matters . . . . . . . . . . . . . . . . . . . . . . . . 26
4.28 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ICBC
5.1 Corporate Organization. . . . . . . . . . . . . . . . . . . . . . 27
5.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Authority; No Violation . . . . . . . . . . . . . . . . . . . . . 28
5.4 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . 30
5.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 30
5.7 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . . 31
5.9 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 31
5.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.11 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.13 ICBC Information. . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14 Compliance with Applicable Law. . . . . . . . . . . . . . . . . . 33
5.15 Ownership of Company Common Stock . . . . . . . . . . . . . . . . 33
5.16 Agreements with Regulatory Agencies . . . . . . . . . . . . . . . 34
<PAGE>
5.17 Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 34
5.19 Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.21 Year 2000 Matters . . . . . . . . . . . . . . . . . . . . . . . . 35
5.22 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.23 Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 Covenants of the Company. . . . . . . . . . . . . . . . . . . . . 36
6.2 Covenants of ICBC . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . 41
7.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . 42
7.3 Stockholder Meeting . . . . . . . . . . . . . . . . . . . . . . . 43
7.4 Legal Conditions to Merger. . . . . . . . . . . . . . . . . . . . 43
7.5 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.6 Stock Exchange Listing. . . . . . . . . . . . . . . . . . . . . . 44
7.7 Employee Benefit Plans; Existing Agreements . . . . . . . . . . . 44
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.9 Additional Agreements . . . . . . . . . . . . . . . . . . . . . . 46
7.10 Coordination of Dividends . . . . . . . . . . . . . . . . . . . . 47
7.11 Notification of Certain Matters . . . . . . . . . . . . . . . . . 47
7.12 Certain Matters, Certain Revaluations, Changes and
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.13 Appointments. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.14 Charitable Contributions. . . . . . . . . . . . . . . . . . . . . 48
7.15 Advisory Board. . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation To Effect the Merger 49
8.2 Conditions to Obligations of ICBC . . . . . . . . . . . . . . . . 49
8.3 Conditions to Obligations of the Company. . . . . . . . . . . . . 51
ARTICLE IX
TERMINATION AND AMENDMENT
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . 56
<PAGE>
9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . 56
9.5 Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE X
GENERAL PROVISIONS
10.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.2 Nonsurvival of Representations, Warranties and Agreements . . . . 59
10.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.5 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.7 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 60
10.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.10 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.11 Assignment; No Third Party Beneficiaries . . . . . . . . . . . . 61
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 1, 1999,
between Independence Community Bank Corp., a Delaware
corporation ("ICBC"), and Broad National Bancorporation, a New
Jersey corporation (the "Company"). ICBC and the Company are
sometimes collectively referred to herein as the "Constituent
Corporations".
WHEREAS, the Boards of Directors of ICBC and the Company
have determined that it is in the best interests of their
respective companies and their stockholders to consummate the
business combination transaction provided for herein in which the
Company will, subject to the terms and conditions set forth
herein, merge (the "Merger") with and into ICBC and immediately
thereafter, Broad National Bank, the wholly owned subsidiary of
the Company, will be merged with and into Independence Community
Bank, the wholly owned subsidiary of ICBC (the "Bank Merger");
and
WHEREAS, each of the directors of the Company has executed a
stockholder agreement as of the date hereof pursuant to which
they have agreed to certain matters with respect to the Merger;
and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also
to prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and
intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation
Law (the "DGCL") and the New Jersey Business Corporation Act (the
"NJBCA"), at the Effective Time (as defined in Section 1.2
hereof), the Company shall merge with and into ICBC. ICBC shall
be the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") in the Merger, and shall continue its
corporate existence under the laws of the State of Delaware. The
name of the Surviving Corporation shall continue to be
Independence Community Bank Corp. Upon consummation of the
Merger, the separate corporate existence of the Company shall
terminate.
1.2 EFFECTIVE TIME. The Merger shall become effective as
set forth in the certificate of merger (the "Certificate of
Merger") which shall be filed with the Secretaries of State of
the <PAGE> States of Delaware and New Jersey (the "Secretaries") on the
Closing Date (as defined in Section 10.1 hereof). The term
"Effective Time" shall be the date and time when the Merger
becomes effective, as set forth in the Certificate of Merger.
1.3 EFFECTS OF THE MERGER. At and after the Effective Time,
the Merger shall have the effects set forth in Sections 259 and
261 of the DGCL and Sections 14A:10-6 and 14A:10-7 of the NJBCA.
1.4 CONVERSION OF COMPANY COMMON STOCK. (a) At the
Effective Time, subject to Section 2.2(e) hereof, each share of
Company common stock, par value $1.00 per share (the "Company
Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than (i) shares of Company Common Stock
held in the Company's treasury, (ii) unallocated and/or unvested
shares of Company Common Stock held in the Company's Long-Term
Capital Accumulation Plan (the "LCAP"), and (iii) shares of
Company Common Stock held directly or indirectly by ICBC or the
Company or any of their respective Subsidiaries (as defined
below) (except for Trust Account Shares and DPC Shares, as such
terms are defined in Section 1.4(b) hereof), shall by virtue of
this Agreement and without any action on the part of the Company,
ICBC or the holder thereof, cease to be outstanding and shall be
converted into and become the right to receive (subject to
adjustment as provided by Section 9.1(g) hereof), at the election
of the holder thereof as provided in Section 1.5, either:
(i) a number of shares of common stock, par value
$0.01 per share, of ICBC ("ICBC Common Stock")
equal to the Final Exchange Ratio, or
(ii) cash in an amount equal to the Per Share
Consideration.
(b) At the Effective Time, (i) all shares of Company Common
Stock that are owned by the Company as treasury stock, (ii) all
unallocated and/or unvested shares of Company Common Stock held
in the Company's LCAP, and (iii) all shares of Company Common
Stock that are owned directly or indirectly by ICBC or the
Company or any of their respective Subsidiaries (other than
shares of Company Common Stock (x) held directly or indirectly in
trust accounts, managed accounts and the like or otherwise held
in a fiduciary capacity for the benefit of third parties (any
such shares, and shares of ICBC Common Stock which are similarly
held, whether held directly or indirectly by ICBC or the Company,
as the case may be, being referred to herein as "Trust Account
Shares")) and (y) held by ICBC or the Company or any of their
respective Subsidiaries in respect of a debt previously
contracted (any such shares of Company Common Stock, and shares
of ICBC Common Stock which are similarly held, being referred to
herein as "DPC Shares"), shall be cancelled and shall cease to
exist and no stock of ICBC or other consideration shall be
delivered in exchange therefor. All shares of ICBC Common Stock
that are owned by the Company or any of its Subsidiaries (other
than Trust Account Shares and DPC Shares) shall become treasury
stock of ICBC.
<PAGE>
(c) On and after the Effective Time, holders of
certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the
"Certificates") shall cease to have any rights as stockholders of
the Company, except the right to receive the consideration set
forth in this Article I, as such consideration may be adjusted
pursuant to the provisions of Section 9.1(g) hereof (the "Merger
Consideration"), for each such share held by them.
(d) If, between the date of this Agreement and the
Effective Time, the shares of ICBC Common Stock shall be changed
into a different number or class of shares by reason of any
reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or a stock dividend thereon
shall be declared with a record date within said period,
appropriate adjustments shall be made to the Preliminary Stock
Ratio, the Minimum Stock Ratio, the Maximum Stock Ratio and the
Final Exchange Ratio (as such terms are defined herein).
(e) For purposes of this Agreement, the following terms
shall (subject to Section 9.1(g) hereof) have the meanings
indicated:
"Aggregate Cash Consideration" shall mean (w)
0.5 multiplied by (x) the Outstanding Shares
Number multiplied by (y) $26.50.
"Aggregate Merger Consideration" shall mean
the sum of (x) the Aggregate Cash
Consideration and (y) the Aggregate Stock
Consideration.
"Aggregate Stock Consideration" shall mean
(w) 0.5 multiplied by (x) the Outstanding
Shares Number multiplied by (y) the Average
Closing Price multiplied by (z) the
Preliminary Stock Ratio.
"Average Closing Price" shall mean the
average of the closing sale prices per share
for ICBC Common Stock as reported on the
Nasdaq Stock Market/National Market System
("Nasdaq/ NMS") (as reported by The Wall
Street Journal, or, if not reported thereby,
another authoritative source), during the ten
(10) consecutive trading-day period during
which the shares of ICBC Common Stock are
traded on the Nasdaq/NMS ending on the tenth
business day immediately prior to the
anticipated Effective Time (the "Pricing
Period").
"Final Exchange Ratio" shall mean the
quotient, rounded to the nearest ten-
thousandth, obtained by dividing the Per
Share Consideration by the Average Closing
Price.
<PAGE>
"Outstanding Shares Number" shall mean shares
of Company Common Stock issued and
outstanding immediately prior to the
Effective Time.
"Per Share Consideration" shall mean the
quotient obtained by dividing the Aggregate
Merger Consideration by the Outstanding
Shares Number.
"Preliminary Stock Ratio" shall mean the
quotient, rounded to the nearest ten-
thousandth obtained by dividing $26.50 by the
Average Closing Price provided, that (i) if
the Average Closing Price is equal to or
greater than $17.25, the Preliminary Stock
Ratio shall be 1.5362 (the "Minimum Stock
Ratio"), and (ii) if the Average Closing
Price is equal to or less than $12.75, the
Preliminary Stock Ratio shall be 2.0784 (the
"Maximum Stock Ratio").
1.5 ELECTION PROCEDURES. (a) An election form and other
appropriate and customary transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and
title to Certificates shall pass, only upon proper delivery of
such Certificates to a bank or trust company designated by ICBC
and reasonably satisfactory to the Company (the "Exchange
Agent")) in such form as the Company and ICBC shall mutually
agree (the "Election Form"), shall be mailed 30 days prior to the
anticipated Effective Time or on such earlier date as ICBC and
the Company shall mutually agree (the "Mailing Date") to each
holder of record of Company Common Stock as of five business days
prior to the Mailing Date ("Election Form Record Date").
Each Election Form shall permit a holder (or the beneficial
owner through appropriate and customary documentation and
instructions) of outstanding Company Common Stock to elect,
subject to provisions of this Section 1.5, to receive, on a per
share basis, with respect to such holder's Company Common Stock
(i) cash (shares as to which such election is made, the "Cash
Election Shares") or (ii) ICBC Common Stock (shares as to which
such election is made, the "Stock Election Shares"). A holder of
Company Common Stock may elect to receive a combination of ICBC
Common Stock and cash with respect to his shares of Company
Common Stock. Notwithstanding the foregoing, no holder of
Company Common Stock may elect to receive ICBC Common Stock
pursuant to the election procedures provided herein with respect
to fewer than 100 shares of Company Common Stock. To be
effective, a properly completed Election Form shall be submitted
to the Exchange Agent on or before 5:00 p.m., New York City time,
on the 20th day following the Mailing Date (or such other time
and date as ICBC and the Company may mutually agree) (the
"Election Deadline"); provided, however, that the Election
Deadline may not occur on or after the Closing Date (as defined
in Section 10.1 hereof).
ICBC shall make available up to two separate Election Forms,
or such additional Election Forms as ICBC may permit, to all
persons who become holders (or beneficial owners) of Company
Common Stock between the Election Form Record Date and close of
business on the <PAGE> business day prior to the Election Deadline. The
Company shall provide to the Exchange Agent all information
reasonably necessary for it to perform as specified herein. An
election shall have been properly made only if the Exchange Agent
shall have actually received a properly completed Election Form
by the Election Deadline.
An Election Form shall be deemed properly completed only if
accompanied by one or more Certificates (or customary affidavits
and indemnification regarding the loss or destruction of such
Certificates or the guaranteed delivery of such Certificates)
representing all shares of Company Common Stock covered by such
Election Form, together with duly executed transmittal materials
included with the Election Form. If a stockholder either (i) does
not submit a properly completed Election Form in a timely
fashion, or (ii) revokes its Election Form prior to the Election
Deadline, the shares of Company Common Stock held by such
stockholder shall be designated "No Election Shares." Shares of
Company Common Stock held by holders who acquired such shares
subsequent to the Election Deadline will be designated "No
Election Shares." ICBC shall cause the Certificates described in
clause (ii) of the immediately preceding sentence to be promptly
returned without charge to the person submitting the Election
Form upon written request to that effect from the person who
submitted the Election Form. Subject to the terms of this
Agreement and of the Election Form, the Exchange Agent shall have
reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to
disregard immaterial defects in any Election Form, and any good
faith decisions of the Exchange Agent regarding such matters
shall be binding and conclusive. Neither ICBC nor the Exchange
Agent shall be under any obligation to notify any person of any
defect in an Election Form.
(b) The "Cash Election Amount" shall be equal to the Per
Share Consideration multiplied by the total number of Cash
Election Shares. Within seven business days after the Election
Deadline, unless the Effective Time has not yet occurred, in
which case as soon thereafter as practicable, ICBC shall cause
the Exchange Agent to effect the allocation among the holders of
Company Common Stock of rights to receive ICBC Common Stock or
cash in the Merger in accordance with the Election Forms as
follows:
(i) If the Aggregate Cash Consideration is greater
than the Cash Election Amount, then:
(A) all Cash Election Shares shall be converted
into the right to receive an amount of cash equal to
the Per Share Consideration,
(B) the Exchange Agent will select, on a pro rata
basis, first from among the holders of No Election
Shares and then, if necessary, from among the holders
of Stock Election Shares, a sufficient number of such
shares ("Cash Designee Shares") such that the sum of
Cash Designee Shares and Cash Election Shares
multiplied by the Per Share Consideration equals as
closely as practicable the Aggregate Cash Consideration
(the Cash Designee Shares shall be converted <PAGE> into the
right to receive an amount of cash equal to the Per
Share Consideration), and
(C) any Stock Election Shares and any No Election
Shares, in each case, not so selected as Cash Designee
Shares shall be converted into the right to receive
ICBC Common Stock at the Final Exchange Ratio.
(ii) If the Aggregate Cash Consideration is less than
the Cash Election Amount, then:
(A) all Stock Election Shares and all No Election
Shares shall be converted into the right to receive
ICBC Common Stock at the Final Exchange Ratio,
(B) the Exchange Agent will select, on a pro rata
basis from among the holders of Cash Election Shares, a
sufficient number of such shares ("Stock Designee
Shares") such that the number of Stock Designee Shares
multiplied by the Per Share Consideration equals as
closely as practicable the difference between the Cash
Election Amount and the Aggregate Cash Consideration
(the Stock Designee Shares shall be converted into the
right to receive ICBC Common Stock at the Final
Exchange Ratio), and
(C) any Cash Election Shares not so selected as
Stock Designee Shares shall be converted into the right
to receive an amount of cash equal to the Per Share
Consideration.
In the event that the Exchange Agent is required pursuant to
Section 1.5(b)(i)(B) to designate from among all Stock Election
Shares the Cash Designee Shares to receive cash, each holder of
Stock Election Shares shall be allocated a pro rata portion of
the remainder of the total Cash Designee Shares less the number
of No Election Shares which are Cash Designee Shares. Such
proration shall reflect the proportion that the number of Stock
Election Shares of each holder of Stock Election Shares bears to
the total number of Stock Election Shares. In the event the
Exchange Agent is required pursuant to Section 1.5(b)(ii)(B) to
designate from among all holders of Cash Election Shares the
Stock Designee Shares to receive ICBC Common Stock, each holder
of Cash Election Shares shall be allocated a pro rata portion of
the total Stock Designee Shares. Such proration shall reflect
the proportion that the number of Cash Election Shares of each
holder of Cash Election Shares bears to the total number of Cash
Election Shares.
1.6 STOCK OPTIONS. (a) At the Effective Time, each option
granted by the Company to purchase shares of Company Common Stock
(each a "Company Option") pursuant to the Company's Stock Option
Plans set forth in Section 4.2(a) of the Company Disclosure
Schedule (as hereinafter defined) (the "Company Option Plans")
which is outstanding and unexercised, <PAGE> immediately prior thereto,
whether or not then vested or exercisable, will, at the election
of the individual holders of the Company Options be either:
(i) cancelled and all rights thereunder be
extinguished ("Cancelled Option Holder"), in consideration for
which the Company shall make payment immediately prior to the
Effective Time an amount determined by multiplying (A) the number
of shares of Company Common Stock underlying such Company Option
by (B) an amount equal to the excess (if any) of (1) the Per
Share Consideration, over (2) the exercise price per share of
such Company Option; or
(ii) converted automatically into an option to purchase
shares of ICBC Common Stock ("Continuing Option Holder") in an
amount, for a term and at an exercise price determined as
provided below (and otherwise subject to the terms of the
particular Company Option Plan pursuant to which each such
Company Option was issued, the agreements evidencing grants
thereunder and any other agreements between the Company and an
optionee regarding Company Options which have been delivered to
ICBC prior to the date of this Agreement):
(A) the number of shares to be subject to the new
option shall be equal to the product of the number of shares of
Company Common Stock subject to the Company Option immediately
prior to the Effective Time and the Final Exchange Ratio,
provided that any fractional shares of ICBC Common Stock
resulting from such multiplication shall be rounded down to the
nearest whole share;
(B) the exercise price per share of ICBC Common
Stock under the new option shall be equal to the exercise price
per share of Company Common Stock under the Company Option
divided by the Final Exchange Ratio, provided that such exercise
price shall be rounded up to the nearest cent;
(C) The term or duration of the new option shall
be the same as that of the Company Option; and
(D) The Board of Directors or the Compensation
Committee thereof may cause the vesting schedule of unvested
stock options granted under the 1993 and 1996 Company Option
Plans to be accelerated so that such options are exercisable as
of the Effective Time.
The adjustment provided herein with respect to any options
which are "incentive stock options" (as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code")) shall
be and is intended to be effected in a manner which is consistent
with Section 424(a) of the Code and, to the extent it is not so
consistent, such Section 424(a) shall override anything to the
contrary contained herein. The duration and other terms of the
new option shall be the same as the original option except as
provided for above and that all references to the Company shall
be deemed to be references to ICBC.
<PAGE>
(b) In order for any Continuing Option Holder to have
his or her Company Options converted into an option to purchase
ICBC Common Stock as set forth in this Section 1.6(a) or for a
Cancelled Option Holder to have his or her Company Option
converted into the right to receive cash, such Continuing Option
Holder or Cancelled Option Holder shall have executed a written
election with respect to such conversion or cancellation no later
than the Election Deadline, which written election shall be in
such form as shall be prescribed by ICBC and reasonably
satisfactory to the Company. No payment shall be made to a
Cancelled Option Holder unless and until such holder has executed
and delivered the foregoing written election. In the event any
holder of a Company Option fails to make an election within the
time frame set forth herein, the Company Option held thereby
shall automatically be converted at the Effective Time into an
option to purchase ICBC Common Stock in the amount and at the
exercise price as calculated pursuant to Section 1.6(a)(ii)
hereof.
(c) Prior to the Effective Time, ICBC shall reserve
for issuance the number of shares of ICBC Common Stock necessary
to satisfy ICBC's obligations under Section 1.6(a) hereof.
Promptly after the Effective Time (but in no event later than
twenty business days thereafter), ICBC shall file with the
Securities and Exchange Commission (the "SEC") a registration
statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the
shares of ICBC Common Stock subject to options to acquire ICBC
Common Stock issued pursuant to Section 1.6(a) hereof, and shall
use its best efforts to maintain the current status of the
prospectus contained therein, as well as comply with applicable
state securities or "blue sky" laws, for so long as such options
remain outstanding.
(d) Prior to the Effective Time, the Company shall
take or cause to be taken all actions required under the Company
Option Plans to provide for the foregoing.
1.7 ICBC COMMON STOCK. Except for shares of ICBC Common
Stock owned by the Company or any of its Subsidiaries (other than
Trust Account Shares and DPC Shares), which shall be converted
into treasury stock of ICBC as contemplated by Section 1.4
hereof, the shares of ICBC Common Stock issued and outstanding
immediately prior to the Effective Time shall be unaffected by
the Merger and such shares shall remain issued and outstanding.
1.8 TAX OPINION ADJUSTMENT. If either (i) the tax opinion
referred to in Section 8.2(c) cannot be rendered (as reasonably
determined by Elias, Matz, Tiernan & Herrick L.L.P.) or (ii) the
tax opinion referred to in Section 8.3(c) cannot be rendered (as
reasonably determined by Stinson, Mag & Fizzell P.C.), in either
case as a result of the Merger potentially failing to qualify as
a reorganization under Section 368(a) of the Code, then ICBC
shall reduce the Aggregate Cash Consideration to the minimum
extent necessary to enable the relevant tax opinion or opinions,
as the case may be, to be rendered, and correspondingly increase
the Aggregate Stock Consideration, based on the Average Closing
Price for the ICBC Common Stock.
1.9 CERTIFICATE OF INCORPORATION. At the Effective Time,
the Certificate of Incorporation of ICBC, as in effect
immediately prior to the Effective Time, shall be the <PAGE> Certificate
of Incorporation of the Surviving Corporation until thereafter
amended in accordance with applicable laws.
1.10 BYLAWS. At the Effective Time, the Bylaws of ICBC, as
in effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter amended in
accordance with applicable law.
1.11 DIRECTORS AND OFFICERS. The directors and officers of
ICBC immediately prior to the Effective Time, together with the
director appointed pursuant to Section 7.13 hereof, shall be the
directors and officers of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified.
1.12 TAX CONSEQUENCES. It is intended that the Merger shall
constitute a reorganization within the meaning of Section 368(a)
of the Code and that this Agreement shall constitute a "plan of
reorganization" for purposes of Section 368 of the Code.
1.13 BANK MERGER. Promptly following the execution of this
Agreement, ICBC Bank (as defined below) and Company Bank (as
defined below) shall enter into the Agreement of Merger (the
"Bank Merger Agreement") in the form annexed hereto as Exhibit A
(which shall qualify as a reorganization under Section 368(a) of
the Code) pursuant to which the Bank Merger Agreement will be
effected pursuant to and with the effect set forth in the rules
and regulations of the New York State Banking Department (the
"Department"), the Federal Deposit Insurance Corporation (the
"FDIC") and the New Jersey Department of Banking (the "New Jersey
Department"), if applicable. The parties hereto intend that the
Bank Merger shall become effective substantially simultaneously
with or immediately following the Effective Time. The
documentation relating to the Bank Merger shall provide that the
directors of ICBC Bank as the surviving entity of the Bank Merger
shall be all of the respective directors of ICBC Bank immediately
prior to such merger together with the director appointed
pursuant to Section 7.13 hereof.
1.14 MODIFICATION OF STRUCTURE. Notwithstanding any
provision of this Agreement to the contrary, ICBC may elect,
subject to the filing of all necessary applications and the
receipt of all required regulatory approvals, to modify the
structure of the transactions contemplated hereby so long as (i)
there are no material adverse federal income tax consequences to
the stockholders of the Company as a result of such modification,
(ii) the consideration to be paid to holders of Company Common
Stock, including shares of Company Common Stock underlying the
Company Options granted pursuant to the Company Option Plans,
under this Agreement is not thereby changed in kind or reduced in
amount solely because of such modification, and (iii) such
modification will not be likely to materially delay the Effective
Time or materially delay or jeopardize receipt of any required
regulatory approvals or of the tax opinions required under
Sections 8.2(c) and 8.3(c).
<PAGE>
ARTICLE II
EXCHANGE OF SHARES
2.1 ICBC TO MAKE SHARES AVAILABLE. At or prior to the
Effective Time, ICBC shall deposit, or shall cause to be
deposited, with the Exchange Agent, for the benefit of the
holders of Certificates, for exchange in accordance with this
Article II, certificates representing the shares of ICBC Common
Stock, the cash in lieu of fractional shares and an amount of
cash sufficient to pay the Aggregate Cash Consideration (such
cash and certificates for shares of ICBC Common Stock, together
with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund") to be issued
pursuant to Section 1.4 and paid pursuant to Section 2.2(a) in
exchange for outstanding shares of Company Common Stock.
2.2 EXCHANGE OF SHARES. (a) As soon as practicable after
the Effective Time, and in no event more than seven business days
thereafter, the Exchange Agent shall mail to each holder of
record of a Certificate or Certificates who has not previously
surrendered such Certificate or Certificates with a Form of
Election a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificates in exchange for the
Merger Consideration into which the shares of Company Common
Stock represented by such Certificate or Certificates shall have
been converted pursuant to this Agreement. The Company shall have
the right to review both the letter of transmittal and the
instructions prior to the Effective Time and provide reasonable
comments thereon. Upon surrender of a Certificate for exchange
and cancellation to the Exchange Agent, together with such letter
of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger
Consideration to which such holder of Company Common Stock shall
have become entitled pursuant to the provisions of Article I
hereof, and the Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on any cash
constituting Merger Consideration (including the cash in lieu of
fractional shares) and any unpaid dividends and distributions, if
any, payable to holders of Certificates.
(b) No dividends or other distributions declared after the
Effective Time with respect to ICBC Common Stock and payable to
the holders of record thereof shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall
surrender such Certificate in accordance with this Article II.
After the surrender of a Certificate in accordance with this
Article II, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with
respect to shares of ICBC Common Stock, if any, represented by
such Certificate.
(c) If any certificate representing shares of ICBC Common
Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it
shall be a condition of the issuance thereof that the Certificate
so surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form
for transfer, and that the person requesting such exchange shall
pay to the Exchange Agent in <PAGE> advance any transfer or other taxes
required by reason of the issuance of a certificate representing
shares of ICBC Common Stock in any name other than that of the
registered holder of the Certificate surrendered, or required for
any other reason, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the shares of
Company Common Stock which were issued and outstanding
immediately prior to the Effective Time. If, after the Effective
Time, Certificates representing such shares are presented for
transfer to the Exchange Agent, they shall be cancelled and
exchanged for Merger Consideration as determined in accordance
with Article I and this Article II.
(e) Notwithstanding anything to the contrary contained
herein, no certificates or scrip representing fractional shares
of ICBC Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividend or distribution with
respect to ICBC Common Stock shall be payable on or with respect
to any fractional share, and such fractional share interests
shall not entitle the owner thereof to vote or to any other
rights of a stockholder of ICBC. In lieu of the issuance of any
such fractional share, ICBC shall pay to each former stockholder
of the Company who otherwise would be entitled to receive a
fractional share of ICBC Common Stock an amount in cash
determined by multiplying (i) the Average Closing Price by (ii)
the fraction of a share of ICBC Common Stock which such holder
would otherwise be entitled to receive pursuant to Section 1.4
hereof.
(f) Any portion of the Exchange Fund that remains unclaimed
by the stockholders of the Company for nine months after the
Effective Time shall be paid to ICBC. Any stockholders of the
Company who have not theretofore complied with this Article II
shall thereafter look only to ICBC for payment of the cash,
shares of ICBC Common Stock, cash in lieu of fractional shares
and unpaid dividends and distributions on the ICBC Common Stock
deliverable in respect of each share of Company Common Stock such
stockholder holds as determined pursuant to this Agreement, in
each case, without any interest thereon. If outstanding
Certificates are not surrendered or the payment for them is not
claimed prior to the date on which such payments would otherwise
escheat to or become the property of any governmental unit or
agency, the unclaimed items shall, to the extent permitted by
abandoned property and any other applicable law, become the
property of ICBC (and to the extent not in its possession shall
be paid over to it), free and clear of all claims or interest of
any person previously entitled to such claims. Notwithstanding
the foregoing, none of ICBC, the Company, the Exchange Agent or
any other person shall be liable to any former holder of shares
of Company Common Stock for any amount properly delivered to a
public official pursuant to applicable abandoned property,
escheat or similar laws.
(g) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by ICBC, the posting by such person of
a bond in such amount as ICBC may direct as indemnity against any
claim that may be made against it with respect to such
<PAGE>
Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the cash and/or shares of
ICBC Common Stock and cash in lieu of fractional shares
deliverable in respect thereof pursuant to this Agreement.
ARTICLE III
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
3.1 DISCLOSURE SCHEDULES. Prior to the execution and
delivery of this Agreement, the Company has delivered to ICBC,
and ICBC has delivered to the Company, a schedule (in the case of
the Company, the "Company Disclosure Schedule," and in the case
of ICBC, the "ICBC Disclosure Schedule") setting forth, among
other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure
requirement contained in a provision hereof or as an exception to
one or more of such party's representations or warranties
contained in Article IV, in the case of the Company, or Article
V, in the case of ICBC, or to one or more of such party's
covenants contained in Article VI or agreements contained in
Article VII; provided, however, that notwithstanding anything in
this Agreement to the contrary, the mere inclusion of an item in
a Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by a party that such
item represents a material exception or material fact, event or
circumstance or that such item has had or would have a Material
Adverse Effect (as defined herein) with respect to either the
Company or ICBC, respectively.
3.2 STANDARDS. (a) No representation or warranty of the
Company contained in Article IV (other than the representations
set forth in the first and third sentences of Section 4.1(a), the
first two sentences of Section 4.1(b) and Sections 4.2, 4.6,
4.8(a), 4.10 and 4.18) or of ICBC contained in Article V (other
than the representations set forth in the first and third
sentences of Section 5.1(a), the first two sentences of Section
5.1(b) and Sections 5.2, 5.6 and 5.8) shall be deemed untrue or
incorrect for any purpose under this Agreement, and no party
hereto shall be deemed to have breached a representation or
warranty for any purpose under this Agreement, in any case as a
consequence of the existence or absence of any fact, circumstance
or event unless such fact, circumstance or event, individually or
when taken together with all other facts, circumstances or events
inconsistent with any representations or warranties contained in
Article IV, in the case of the Company, or Article V, in the case
of ICBC, has had a Material Adverse Effect with respect to the
Company or ICBC, respectively.
(b) As used in this Agreement, the term "Material Adverse
Effect" means, with respect to ICBC or the Company, as the case
may be, a material adverse effect on (i) the business, results of
operations or financial condition of such party and its
Subsidiaries taken as a whole, other than any such effect
attributable to or resulting from (x) any change in banking or
similar laws, rules or regulations of general applicability to
banks, thrift institutions or their holding companies or
interpretations thereof by courts or governmental authorities,
(y) any change in GAAP (as defined herein) or regulatory
accounting principles applicable to banks, thrifts or their
holding companies <PAGE> generally, or (z) any action or omission of the
Company or ICBC or any Subsidiary of either of them taken with
the prior written consent of the other party hereto or (ii) the
ability of such party and its Subsidiaries to consummate the
transactions contemplated hereby. As used in this Agreement, the
word "Subsidiary" when used with respect to any party means any
corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such
party for financial reporting purposes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to Article III, the Company hereby represents and
warrants to ICBC (subject to the Company Disclosure Schedule) as
follows:
4.1 CORPORATE ORGANIZATION. (a) The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey. The Company has the
corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties
and assets owned or leased by it makes such licensing or
qualification necessary. The Company is duly registered as a bank
holding company under the Bank Holding Company Act, as amended
("BHCA") and the regulations of the Board of Governors of the
Federal Reserve System (the "FRB") promulgated thereunder. The
Certificate of Incorporation and Bylaws of the Company, copies of
which are set forth in Section 4.1 of the Company Disclosure
Schedule, are true and correct copies of such documents as in
effect as of the date of this Agreement.
(b) Broad National Bank (the "Company Bank") is a stock
national bank duly organized, validly existing and in good
standing under the laws of the United States of America. The
deposit accounts of the Company Bank are insured by the FDIC
through the Bank Insurance Fund (the "BIF") to the fullest extent
permitted by law, and all premiums and assessments required to be
paid in connection therewith have been paid when due. Each of the
Company's other Subsidiaries, whether direct or indirect, is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or
organization. Each of the Company's Subsidiaries has the
corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business
conducted by it or the character or the location of the
properties and assets owned or leased by it makes such licensing
or qualification necessary. The certificate of incorporation,
articles of association, bylaws and similar governing documents
of each Subsidiary of the Company, copies of which have
previously been delivered to ICBC, are true and correct copies of
such documents as in effect as of the date of this Agreement.
<PAGE>
(c) The minute books of the Company and each of its
Subsidiaries contain true and correct records of all meetings and
other corporate actions held or taken since December 31, 1995 of
their respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
4.2 CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 10,000,000 shares of Company Common Stock,
20,000 shares of preferred stock 1985 class, par value $10.00 per
share, and 1,500,000 shares of preferred stock, par value $1.00
per share (collectively, the "Company Preferred Stock"). As of
date hereof, there were 4,950,254 shares of Company Common Stock
outstanding and 296,500 shares of Company Common Stock held by
the Company as treasury stock. As of the date hereof, there were
(i) no shares of Company Common Stock reserved for issuance upon
exercise of outstanding stock options or otherwise except for (x)
462,035 shares of Company Common Stock reserved for issuance
pursuant to the Company Option Plans described in Section 4.2(a)
of the Company Disclosure Schedule and (y) 64,172 shares of
Company Common Stock reserved for issuance pursuant to the LCAP
described in Section 4.2(a) of the Company Disclosure Schedule
and (ii) no shares of Company Preferred Stock issued or
outstanding, held in the Company's treasury or reserved for
issuance upon exercise of outstanding stock options or otherwise.
All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. Except as referred
to above or reflected in Section 4.2(a) of the Company Disclosure
Schedule, the Company does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or
issuance of any shares of Company Common Stock, or Company
Preferred Stock or any other equity security of the Company or
any securities representing the right to purchase or otherwise
receive any shares of Company Common Stock or any other equity
security of the Company. The names of the optionees, the date of
each option to purchase Company Common Stock granted, the number
of shares subject to each such option, the expiration date of
each such option, any vesting schedule with respect to an option
which is not yet fully vested, and the price at which each such
option may be exercised under the Company Option Plans are set
forth in Section 4.2(a) of the Company Disclosure Schedule. The
names of the awardees, date of all awards, the number of shares
subject to such awards, the amount of shares vested thereunder
and the amount of shares subject to proration pursuant to the
LCAP are set hereof in Section 4.2(a) of the Company Disclosure
Schedule.
(b) Section 4.2(b) of the Company Disclosure Schedule sets
forth a true and correct list of all of the Subsidiaries of the
Company, including a listing of the jurisdiction of incorporation
thereof. Except as set forth in Section 4.2(b) of the Company
Disclosure Schedule, the Company owns, directly or indirectly,
all of the issued and outstanding shares of the capital stock of
each of such Subsidiaries, free and clear of all liens, charges,
encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No Subsidiary of
the Company has or is bound by any outstanding <PAGE> subscriptions,
options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of
capital stock or any other equity security of such Subsidiary or
any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security
of such Subsidiary. Assuming compliance by ICBC with Section 1.6
hereof, and the satisfaction of the conditions contained in
Sections 8.1 and 8.2 hereof, at the Effective Time, there will
not be any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character by which the Company
or any of its Subsidiaries will be bound calling for the purchase
or issuance of any shares of the capital stock of the Company or
any of its Subsidiaries.
4.3 AUTHORITY; NO VIOLATION. (a) The Company has full
corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby and thereby have been
duly and validly approved by the Board of Directors of the
Company. The Board of Directors of the Company has directed that
this Agreement and the transactions contemplated hereby be
submitted to the Company's stockholders for approval at a meeting
of such stockholders and, except for the adoption of this
Agreement by the requisite vote of the Company's stockholders, no
other corporate proceedings on the part of the Company are
necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Company and (assuming
due authorization, execution and delivery by ICBC) this Agreement
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except as enforcement may be limited by general principles of
equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) The Company Bank has full corporate power and authority
to execute and deliver the Bank Merger Agreement and, subject to
the receipt of all regulatory approvals and the approval of the
Company as the sole stockholder of the Company Bank, to
consummate the transactions contemplated thereby. The execution
and delivery of the Bank Merger Agreement and the consummation of
the transactions contemplated thereby will be duly and validly
approved by the Board of Directors of the Company Bank and by the
Company as the sole stockholder of the Company Bank. Upon the
due and valid approval of the Bank Merger Agreement by the
Company as the sole stockholder of the Company Bank and by the
Board of Directors of the Company Bank, no other corporate
proceedings on the part of the Company Bank will be necessary to
consummate the transactions contemplated thereby. The Bank
Merger Agreement, upon execution and delivery by the Company
Bank, will be duly and validly executed and delivered by the
Company Bank and will (assuming due authorization, execution and
delivery by ICBC Bank) constitute a valid and binding obligation
of the Company Bank, enforceable against the Company Bank in
accordance with its terms, except as enforcement may be limited
by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally.
<PAGE>
(c) Neither the execution and delivery of this Agreement by
the Company or the execution and delivery of the Bank Merger
Agreement by the Company Bank, nor the consummation by the
Company of the transactions contemplated hereby or the Company
Bank of the transactions contemplated by the Bank Merger
Agreement, nor compliance by the Company with any of the terms or
provisions hereof or the Company Bank with the provisions of the
Bank Merger Agreement, will (i) violate any provision of the
Restated Certificate of Incorporation or Bylaws of the Company,
the Articles of Association or Bylaws of the Company Bank or the
certificate of incorporation, bylaws or similar governing
documents of any of its Subsidiaries, or (ii) assuming that the
consents and approvals referred to in Section 4.4 hereof are duly
obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its Subsidiaries, or any of
their respective properties or assets, or (y) violate, conflict
with, result in a breach of any provision of or the loss of any
benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the respective properties
or assets of the Company or any of its Subsidiaries under, any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or any of its
Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected.
4.4 CONSENTS AND APPROVALS. Except for (a) the filing of
applications and notices, as applicable, with the Office of
Thrift Supervision ("OTS") under the Home Owners Loan Act, as
amended (" HOLA"), and the rules and regulations of the OTS, with
the FDIC under the Bank Merger Act and the Federal Deposit
Insurance Act and the rules and regulations of the FDIC, and, to
the extent applicable, the filing of applications and notices
with the FRB and the OCC, and approval of such applications and
notices, (b) the filing of such applications, filings,
authorizations, orders and approvals as may be required under
applicable state law (the "State Banking Approvals"), (c) the
filing with the SEC of a proxy statement in definitive form
relating to the meeting of the Company's stockholders to be held
in connection with this Agreement and the transactions
contemplated hereby (the "Proxy Statement") and the filing and
declaration of effectiveness of the registration statement on
Form S-4 (the "Form S-4") in which the Proxy Statement will be
included as part of the prospectus contained therein, (d) the
approval of this Agreement by the requisite vote of the
stockholders of the Company, (e) the filing of the Certificate of
Merger with the Secretaries pursuant to the DGCL and the NJBCA,
(f) approval of the listing of the ICBC Common Stock to be issued
in the Merger on the Nasdaq/NMS, and (g) such other filings,
authorizations or approvals as may be set forth in Section 4.4 of
the Company Disclosure Schedule, no consents or approvals of or
filings or registrations with any court, administrative agency or
commission or other governmental authority or instrumentality
(each a "Governmental Entity") or of or with any third party are
necessary in connection with (1) the execution and delivery by
the Company of this Agreement and the Bank Merger Agreement by
the Company Bank and (2) the consummation by the Company of the
Merger and the Company Bank of the Bank Merger Agreement and the
other transactions contemplated hereby.
<PAGE>
4.5 REPORTS. The Company and each of its Subsidiaries have
timely filed all reports, registrations and statements, together
with any amendments required to be made with respect thereto,
that they were required to file since December 31, 1995 with (i)
the FRB, (ii) the Office of the Comptroller (the "OCC"), (iii)
the FDIC, (iv) any state banking commissions or any other state
regulatory authority (each a "State Regulator") and (v) any other
self-regulatory organization ("SRO") (collectively the
"Regulatory Agencies"), and have paid all fees and assessments
due and payable in connection therewith. Except for normal
examinations conducted by a Regulatory Agency in the regular
course of the business of the Company and its Subsidiaries and
except as set forth in Section 4.5 of the Company Disclosure
Schedule, no Regulatory Agency has initiated any proceeding or
investigation into the business or operations of the Company or
any of its Subsidiaries since December 31, 1995. Except as set
forth in Section 4.5 of the Company Disclosure Schedule, there is
no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any
examinations of the Company or any of its Subsidiaries.
4.6 FINANCIAL STATEMENTS. The Company has previously
delivered to ICBC copies of (a) the consolidated statements of
financial condition of the Company and its Subsidiaries as of
December 31, for the fiscal years 1996 and 1997, and the related
consolidated statements of income, changes in shareholders'
equity and cash flows for the fiscal years 1995, 1996 and 1997,
inclusive, as reported in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 filed with the SEC
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in each case accompanied by the audit report of
KPMG Peat Marwick LLP, independent public accountants with
respect to the Company, and (b) the unaudited consolidated
statement of financial condition of the Company and its
Subsidiaries as of September 30, 1998 and the related unaudited
consolidated statements of income, cash flows and changes in
shareholders' equity for the nine-month periods then ended as
reported in the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1998 filed with the SEC under the
Exchange Act. The December 31, 1997 consolidated statement of
financial condition of the Company (including the related notes,
where applicable) fairly presents the consolidated financial
position of the Company and its Subsidiaries as of the date
thereof, and the other financial statements referred to in this
Section 4.6 (including the related notes, where applicable)
fairly present, and the financial statements to be filed with the
SEC after the date hereof will fairly present (subject, in the
case of the unaudited statements, to recurring audit adjustments
normal in nature and amount), the results of the consolidated
operations and consolidated financial position of the Company and
its Subsidiaries for the respective fiscal periods or as of the
respective dates therein set forth; each of such statements
(including the related notes, where applicable) complies, and the
financial statements to be filed with the SEC after the date
hereof will comply, with applicable accounting requirements and
with the published rules and regulations of the SEC with respect
thereto; and each of such statements (including the related
notes, where applicable) has been, and the financial statements
to be filed with the SEC after the date hereof will be, prepared
in accordance with generally accepted accounting principles
("GAAP") consistently applied during the periods involved, or, in
the case of unaudited statements, as permitted by Form 10-Q. The
<PAGE>
books and records of the Company and its Subsidiaries have been,
and are being, maintained in accordance with GAAP and any other
applicable legal and accounting requirements and reflect only
actual transactions.
4.7 BROKER'S FEES. Neither the Company nor any Subsidiary
of the Company nor any of their respective officers or directors
has employed any broker or finder or incurred any liability for
any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement,
except that the Company has engaged, and will pay a fee or
commission to, Ryan, Beck & Co., Inc. ("Ryan, Beck") in
accordance with the terms of a letter agreement between Ryan,
Beck and the Company, a true and correct copy of which has been
previously delivered by the Company to ICBC.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Since
September 30, 1998, there has been no change or development or
combination of changes or developments which, individually or in
the aggregate, has had a Material Adverse Effect on the Company.
(b) Since September 30, 1998, the Company and its
Subsidiaries have carried on their respective businesses in the
ordinary course consistent with their past practices.
(c) Except as set forth in Section 4.8(c) of the Company
Disclosure Schedule, since December 31, 1998, neither the Company
nor any of its Subsidiaries has (i) increased the wages,
salaries, compensation, pension, or other fringe benefits or
perquisites payable to any executive officer, employee, or
director from the amount thereof in effect as of December 31,
1998 (which amounts have been previously disclosed to ICBC),
granted any severance or termination pay, entered into any
contract to make or grant any severance or termination pay, or
paid any bonus (except for salary increases and bonus payments
made in the ordinary course of business consistent with past
practices), (ii) suffered any strike, work stoppage, slow-down,
or other labor disturbance, (iii) been a party to a collective
bargaining agreement, contract or other agreement or
understanding with a labor union or organization, or (iv) had any
union organizing activities.
4.9 LEGAL PROCEEDINGS. (a) Neither the Company nor any of
its Subsidiaries is a party to any, and there are no pending or,
to the Company's best knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against
the Company or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this
Agreement or the Bank Merger Agreement.
(b) Except as set forth in Section 4.9(a) of the Company
Disclosure Schedule, there is no injunction, order, judgment,
decree or regulatory restriction imposed upon the Company, any of
its Subsidiaries or the assets of the Company or any of its
Subsidiaries.
4.10 TAXES. (a) Each of the Company and its Subsidiaries
has (i) duly and timely filed or will duly and timely file
(including applicable extensions granted without penalty) all Tax
<PAGE>
Returns (as hereinafter defined) required to be filed at or prior
to the Effective Time, and such Tax Returns which have been filed
are, and those to be hereinafter filed will be, true, correct and
complete in all material respects, and (ii) paid in full or made
adequate provision in the financial statements of the Company (in
accordance with GAAP) for all Taxes (as hereinafter defined)
shown to be due on such Tax Returns and will pay in full or make
adequate provision for all Taxes other than Taxes being contested
by the Company in good faith for which adequate provision for on
the financial statements of the Company (in accordance with GAAP)
have been made. There are no material liens for Taxes upon the
assets of either the Company or its Subsidiaries except for
statutory liens for current Taxes not yet due. As of the date
hereof (i) neither the Company nor any of its Subsidiaries has
requested any extension of time within which to file any Tax
Returns in respect of any fiscal year which have not since been
filed and no request for waivers of the time to assess any Taxes
are pending or outstanding, and (ii) except as set forth in
Section 4.10(a) of the Company Disclosure Schedule with respect
to each taxable period of the Company and its Subsidiaries, the
federal and state income Tax Returns of the Company and its
Subsidiaries have been audited by the Internal Revenue Service or
appropriate state tax authorities or the time for assessing and
collecting income Tax with respect to such taxable period has
closed and such taxable period is not subject to review. Neither
the Company nor any of its Subsidiaries (i) has made an election
under Section 341(f) of the Code, (ii) except as set forth in
Section 4.10(a) of the Company Disclosure Schedule has made any
payment, is obligated to make any payment, or is a party to any
agreement that could obligate it to make any payment that would
not be deductible under Section 280G of the Code, (iii) has
issued or assumed any obligation under Section 279 of the Code,
any high yield discount obligation as described in Section 163(i)
of the Code or any registration- required obligation within the
meaning of Section 163(f)(2) of the Code that is not in
registered form, or (iv) is or has been a United States real
property holding corporation within the meaning of Section
897(c)(2) of the Code.
(b) For the purposes of this Agreement, "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments
imposed by any United States federal, state, local or foreign
taxing authority, including, but not limited to income, excise,
property, sales, transfer, franchise, payroll, withholding,
social security or other taxes, including any interest, penalties
or additions attributable thereto. For purposes of this
Agreement, "Tax Return" shall mean any return, report,
information return or other document (including any related or
supporting information) with respect to Taxes.
4.11 EMPLOYEES. (a) Section 4.11(a) of the Company
Disclosure Schedule sets forth a true and correct list of each
deferred compensation plan, incentive compensation plan, equity
compensation plan, "welfare" plan, fund or program (within the
meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")); "pension" plan, fund
or program (within the meaning of Section 3(2) of ERISA); each
"stay in place" bonus, retention, employment, consulting,
independent contractor, termination, severance or change in
control agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be
contributed to by, or with respect to which an obligation or
liability exists of (the "Plans"), the <PAGE> Company, any of its
Subsidiaries or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), all of which together with
the Company would be deemed a "single employer" within the
meaning of Section 4001 of the ERISA, for the benefit of any
employee or director or former employee or former director of the
Company, any Subsidiary or any ERISA Affiliate or any person who
is an independent contractor or consultant to the Company, any of
its Subsidiaries or any ERISA Affiliate.
(b) The Company has heretofore delivered to ICBC with
respect to each of the Plans true and correct copies of each of
the following documents if applicable: (i) the Plan document,
including all amendments thereto, and trust agreement or other
funding arrangement including insurance contracts and policies;
(ii) the actuarial report for such Plan for each of the last two
years and any subsequent changes to actuarial assumptions; (iii)
the most recent determination letter from the Internal Revenue
Service ("IRS") for such Plan; and (iv) the most recent Form
5500, summary plan description and related summaries of material
modifications.
(c) Each of the Plans has been and is being operated and
administered in accordance with its terms and is in compliance
with applicable law, including but not limited to, the Code and
ERISA; each of the Plans intended to be "qualified" within the
meaning of Section 401(a) of the Code has received a favorable
determination letter from the IRS and the Company is not aware of
any circumstances likely to result in the revocation of any such
favorable determination letter except as set forth in Section
4.11(c) of the Company Disclosure Schedule; except as set forth
in Section 4.11(c) of the Company Disclosure Schedule, no Plan
provides benefits, including without limitation death or medical
benefits (whether or not insured), with respect to current or
former employees of the Company, its Subsidiaries or any ERISA
Affiliate beyond their retirement or other termination of
service, other than (w) coverage mandated by applicable law, (x)
death benefits or retirement benefits under any "employee pension
plan," as that term is defined in Section 3(2) of ERISA, (y)
deferred compensation benefits accrued as liabilities on the
books of the Company, its Subsidiaries or the ERISA Affiliates or
(z) benefits the full cost of which is borne by the current or
former employee (or his beneficiary); no liability under Title IV
of ERISA has been incurred by the Company, its Subsidiaries or
any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to the Company,
its Subsidiaries or an ERISA Affiliate of incurring a material
liability thereunder; no Plan has an accumulated or waived
funding deficiency within the meaning of Section 412 of the Code;
neither the Company nor any ERISA Affiliate has incurred,
directly or indirectly, any liability to or on account of a Plan
pursuant to Title IV of ERISA (other than Pension Benefit
Guarantee Corporation ("PBGC") premiums); to the knowledge of the
Company, no proceedings have been instituted to terminate any
Plan that is subject to Title IV of ERISA; no "reportable event,"
as such term is defined in Section 4043(c) of ERISA, has occurred
with respect to any Plan (other than a reportable event with
respect to which the thirty day notice period has been waived);
no condition exists that presents a material risk to the Company
of incurring a liability to or on account of a Plan pursuant to
Title IV of ERISA; no Plan is a multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA and no Plan is a multiple
employer plan as defined in Section 413 of the Code; there are no
pending or, to the knowledge of the Company, threatened <PAGE> or
anticipated claims (other than routine claims for benefits) by,
on behalf of or against any of the Plans or any trusts related
thereto; except as set forth in Section 4.11(c) of the Company
Disclosure Schedule, the fair market value of the assets of each
Plan subject to Title IV of ERISA exceeds the present value of
the benefit liabilities (as defined in Section 4001(a)(16) of
ERISA) under such Plan as of the most recent plan year end prior
to the date hereof, calculated using the actuarial assumptions
used in the most recent actuarial valuation of such Plan as of
the date hereof; and there is not currently any legally binding
commitment by the Company or any ERISA Affiliate to create an
additional Plan or amend any Plan (except amendments to comply
with law which do not materially increase the cost of such Plan)
and the Company and its Subsidiaries do not have any obligations
for post-retirement or post-employment welfare benefits that
cannot be amended or terminated upon sixty days' notice or less
without incurring any liability thereunder, except for coverage
required by Part 6 of Title 1 of ERISA or Section 4980B of the
Code, the premium cost of which is borne (to the extent permitted
by law) by the insured individuals.
4.12 SEC REPORTS. The Company has previously delivered to
ICBC a true and correct copy of each (a) final registration
statement, prospectus, report, schedule and definitive proxy
statement filed since December 31, 1995 by the Company with the
SEC pursuant to the Securities Act or the Exchange Act (the
"Company Reports") and (b) communication mailed by the Company to
its stockholders since December 31, 1995, and no such
registration statement, prospectus, report, schedule, proxy
statement or communication contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading, except that information as of a later date
shall be deemed to modify information as of an earlier date. The
Company has timely filed all Company Reports and other documents
required to be filed by it under the Securities Act and the
Exchange Act, and, as of their respective dates, all Company
Reports complied with the published rules and regulations of the
SEC with respect thereto.
4.13 COMPANY INFORMATION. The information relating to the
Company and its Subsidiaries which is provided to ICBC by the
Company for inclusion in the Proxy Statement and the Form S-4, or
in any other document filed with any other regulatory agency in
connection herewith, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement (except for
such portions thereof that relate only to ICBC or any of its
Subsidiaries) will comply with the provisions of the Exchange Act
and the rules and regulations thereunder.
4.14 COMPLIANCE WITH APPLICABLE LAW. The Company and each of
its Subsidiaries hold, and have at all times held, all licenses,
franchises, permits and authorizations necessary for the lawful
conduct of their respective businesses under and pursuant to all,
and have complied with and are not in default in any respect
under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to
the Company or any of <PAGE> its Subsidiaries, and neither the Company
nor any of its Subsidiaries knows of or has received notice of
any violations of any of the above.
4.15 CERTAIN CONTRACTS. (a) Except as set forth in Section
4.15(a) of the Company Disclosure Schedule, neither the Company
nor any of its Subsidiaries is a party to or bound by any
contract (whether written or oral including, but not limited to,
any stock option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan or other similar plan) (i) with
respect to the employment of any directors, officers, employees
or consultants, (ii) which, upon the consummation of the
transactions contemplated by this Agreement or the Bank Merger
Agreement, will (either alone or upon the occurrence of any
additional acts or events) result in any payment or benefits
(whether of severance pay or otherwise) becoming due, or the
acceleration or vesting of any rights to any payment or benefits,
from ICBC, the Company, the Surviving Corporation or any of their
respective Subsidiaries to any director, officer, employee or
consultant thereof, (iii) which is a material contract (as
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be
performed after the date of this Agreement that has not been
filed or incorporated by reference in the Company Reports, (iv)
which is a consulting agreement (including data processing,
software programming and licensing contracts) not terminable on
30 days or less notice involving the payment of more than $75,000
per annum, (v) which materially restricts the conduct of any line
of business by the Company or any of its Subsidiaries or (vi) any
of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the Bank
Merger Agreement, or the value of any of the benefits of which
will be calculated on the basis of any of the transactions
contemplated by this Agreement or the Bank Merger Agreement. Each
contract, arrangement, commitment or understanding of the type
described in this Section 4.15(a), whether or not set forth in
Section 4.15(a) of the Company Disclosure Schedule, is referred
to herein as a "Company Contract". The Company has previously
delivered to ICBC true and correct copies of each Company
Contract.
(b) With respect to Company Contracts, (i) each Company
Contract is valid and binding and in full force and effect and
has received, if required, all regulatory and/or shareholder
approvals, (ii) the Company and each of its Subsidiaries has
performed all obligations required to be performed by it to date
under each Company Contract, (iii) no event or condition exists
which constitutes or, after notice or lapse of time or both,
would constitute, a default on the part of the Company or any of
its Subsidiaries under any Company Contract, and (iv) no other
party to any Company Contract is, to the knowledge of the
Company, in default in any respect thereunder.
(c) Section 4.15 of the Company Disclosure Schedule
contains a schedule showing the maximum monetary amounts
payable, whether individually or in the aggregate (including any
tax indemnification payments in respect of income and/or excise
taxes), and identifying the types and estimated amounts of the
in-kind benefits due under any Plan or Company Contract other
than a tax-qualified plan for each director of the Company or
Company Bank, each officer of the Company or the Company Bank
with the position of vice president or higher and any consultant
to the Company or the Company Bank, specifying the assumptions in
such schedule.
<PAGE>
4.16 AGREEMENTS WITH REGULATORY AGENCIES. Except as set
forth in Section 4.16 of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries is subject to any cease-
and-desist or other order issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with,
or is a party to any commitment letter or similar undertaking to,
or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of (each, whether or not set
forth on Section 4.16 of the Company Disclosure Schedule, a
"Regulatory Agreement"), any Governmental Entity that restricts
the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its
business, nor has the Company or any of its Subsidiaries been
advised by any Governmental Entity that it is considering issuing
or requesting any Regulatory Agreement.
4.17 ENVIRONMENTAL MATTERS. (a) Except as set forth in
Section 4.17(a) of the Company Disclosure Schedule, each of the
Company and its Subsidiaries, each of the Participation
Facilities and, to the best knowledge of the Company, the Loan
Properties (each as hereinafter defined), are in compliance with
all applicable federal, state and local laws, including common
law, regulations and ordinances, and with all applicable decrees,
orders and contractual obligations relating to pollution or the
discharge of, or exposure to, Hazardous Materials (as hereinafter
defined) in the environment or workplace ("Environmental Laws");
(b) There is no suit, claim, action, proceeding or
investigation, pending or, to the best knowledge of the Company,
threatened (or to the best knowledge of the Company, no past or
present actions activities, circumstances, conditions, events or
incidents that could form the basis of any such suit, claim,
action, proceeding, investigation or notice), before any
Governmental Entity or other forum in which the Company, any of
its Subsidiaries, any Participation Facility or any Loan Property
(or person or entity whose liability for any such suit, claim,
action, proceeding, investigation or notice the Company, any of
its Subsidiaries, Participation Facility or Loan Property has or
may have been retained or assumed either contractually or by
operation of law), has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor) with any
Environmental Laws, or (y) relating to the release, threatened
release or exposure to or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Material whether or not
occurring at or on a site owned, leased or operated by the
Company or any of its Subsidiaries, any Participation Facility or
any Loan Property;
(c) Except as set forth in Section 4.17(c) of the Company
Disclosure Schedule, to the best knowledge of the Company, during
the period of (x) the Company's or any of its Subsidiaries'
ownership or operation of any of their respective current or
former properties, (y) the Company's or any of its Subsidiaries'
participation in the management of any Participation Facility, or
(z) the Company's or any of its Subsidiaries' interest in a Loan
Property, there has been no release of Hazardous Materials in,
on, under or affecting any such property. Except as set forth in
Section 4.17(c) of the Company Disclosure Schedule, to the best
knowledge of the Company, prior to the <PAGE> period of (x) the
Company's or any of its Subsidiaries' ownership or operation of
any of their respective current or former properties, (y) the
Company's or any of its Subsidiaries' participation in the
management of any Participation Facility, or (z) the Company's or
any of its Subsidiaries' interest in a Loan Property, there was
no release of Hazardous Materials in, on, under or affecting any
such property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this
Section 4.17: (x) "Hazardous Materials" means any chemicals,
pollutants, contaminants, wastes, hazardous or toxic substances,
petroleum or other regulated substances or materials, (y) "Loan
Property" means any property in which the Company or any of its
Subsidiaries holds a security interest, and, where required by
the context, said term means the owner or operator of such
property; and (z) "Participation Facility" means any facility in
which the Company or any of its Subsidiaries participates in the
management and, where required by the context, said term means
the owner or operator of such property.
4.18 OPINION. Prior to the execution of this Agreement, the
Company has received an opinion from Ryan, Beck to the effect
that as of the date thereof and based upon and subject to the
matters set forth therein, the Merger Consideration is fair to
the stockholders of the Company from a financial point of view.
Such opinion has not been amended or rescinded as of the date of
this Agreement.
4.19 APPROVALS. As of the date of this Agreement, the
Company knows of no reason why all regulatory approvals required
for the consummation of the transactions contemplated hereby
(including, without limitation, the Merger and the Bank Merger)
should not be obtained.
4.20 LOAN PORTFOLIO. (a) Except as set forth in Schedule
4.20(a) of the Company Disclosure Schedule, with respect to each
loan owned by the Company or its Subsidiaries in whole or in part
(each, a "Loan"), to the best knowledge of the Company:
(i) the note and the related security documents are
each legal, valid and binding obligations of the maker or
obligor thereof, enforceable against such maker or obligor in
accordance with their terms;
(ii) neither the Company nor any of its Subsidiaries
nor any prior holder of a Loan has modified the note or any of
the related security documents in any material respect or
satisfied, canceled or subordinated the note or any of the
related security documents except as otherwise disclosed by
documents in the applicable Loan file;
(iii) the Company or a Subsidiary is the sole
holder of legal and beneficial title to each Loan (or the
Company's applicable participation interest, as applicable),
except as otherwise referenced on the books and records of the
Company;
(iv) the note and the related security documents,
copies of which are included in the Loan files, are true and
correct copies of the documents they purport to be and have not
<PAGE>
been suspended, amended, modified, canceled or otherwise changed
except as otherwise disclosed by documents in the applicable
Loan file;
(v) there is no pending or threatened condemnation
proceeding or similar proceeding affecting the property which
serves as security for a Loan, except as otherwise referenced on
the books and records of the Company;
(vi) there is no pending or threatened litigation or
proceeding relating to the property which serves as security for
a Loan; and
(vii) with respect to a Loan held in the form of a
participation, the participation documentation is legal, valid,
binding and enforceable.
(b) Except as set forth in Section 4.20(b) of the Company
Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any written or oral (i) loan
agreement, note or borrowing arrangement (including, without
limitation, leases, credit enhancements, commitments, guarantees
and interest-bearing assets) (collectively, "Loans"), under the
terms of which the obligor was, as of December 31, 1998, 90 days
or more delinquent in payment of principal or interest or in
default of any other provision, or (ii) Loan with any director,
executive officer or five percent or greater stockholder of the
Company or any of its Subsidiaries, or to the knowledge of the
Company, any person, corporation or enterprise controlling,
controlled by or under common control with any of the foregoing.
Section 4.20 of the Company Disclosure Schedule sets forth (i)
all of the Loans of the Company or any of its Subsidiaries that
as of December 31, 1998 were classified by any bank examiner
(whether regulatory or internal) as "Other Loans Specially
Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Credit Risk Assets", "Concerned
Loans", "Watch List" or words of similar import, together with
the principal amount of and accrued and unpaid interest on each
such Loan and the identity of the borrower thereunder, (ii) by
category of Loan (i.e., commercial, consumer, etc.), all of the
other Loans of the Company and its Subsidiaries that as of
December 31, 1998 were classified as such, together with the
aggregate principal amount of and accrued and unpaid interest on
such Loans by category and (iii) each asset of the Company that
as of December 31, 1998 was classified as "Other Real Estate
Owned" and the book value thereof.
4.21 PROPERTY. Each of the Company and its Subsidiaries has
good and marketable title free and clear of all liens,
encumbrances, mortgages, pledges, charges, defaults or equitable
interests to all of the properties and assets, real and personal,
tangible or intangible, which are reflected on the consolidated
statement of financial condition of the Company as of September
30, 1998 or acquired after such date, except (i) liens for Taxes
not yet due and payable or contested in good faith by appropriate
proceedings, (ii) pledges to secure deposits and other liens
incurred in the ordinary course of business, (iii) such
imperfections of title, easements and encumbrances, if any, as do
not interfere with the use of the respective property as such
property is used on the date of this Agreement, (iv) for
dispositions and encumbrances of, or on, such properties or
assets <PAGE> in the ordinary course of business and (v) mechanics',
materialmen's, workmen's, repairmen's, warehousemen's, carrier's
and other similar liens and encumbrances arising in the ordinary
course of business. All leases pursuant to which the Company or
any Subsidiary of the Company, as lessee, leases real or personal
property are valid and enforceable in accordance with their
respective terms and neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any other
party thereto, is in default thereunder. All material tangible
properties of the Company and each of its Subsidiaries are in
good state of maintenance and repair, conform with all applicable
ordinances, regulations and zoning laws and are considered by the
Company to be adequate for the current business of the Company
and its Subsidiaries.
4.22 REORGANIZATION. The Company has no reason to believe
that the Merger will fail to qualify as a reorganization under
Section 368(a) of the Code.
4.23 ANTITAKEOVER PROVISIONS INAPPLICABLE. The Board of
Directors of the Company has approved the transactions
contemplated by this Agreement and the Bank Merger Agreement such
that the provisions of Section 14A:10A-5 of the NJBCA and 49:5-3
of the New Jersey Revised Statutes will not apply to this
Agreement, the Bank Merger Agreement or any of the transactions
contemplated hereby or thereby.
4.24 INSURANCE. The Company and its Subsidiaries are
presently insured, and since December 31, 1995 have been insured,
for reasonable amounts with financially sound and reputable
insurance companies, against such risks as companies engaged in a
similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies
and bonds maintained by the Company and its Subsidiaries are in
full force and effect, the Company and its Subsidiaries are not
in default thereunder and all material claims thereunder have
been filed in due and timely fashion.
4.25 INVESTMENT SECURITIES; BORROWINGS; DEPOSITS. (a) Except
for investments in Federal Home Loan Bank Stock, pledges to
secure Federal Home Loan Bank borrowings and reverse repurchase
agreements entered into in arm's-length transactions pursuant to
normal commercial terms and conditions and entered into in the
ordinary course of business, restrictions that exist for
securities to be classified as "held to maturity," and securities
pledged with respect to certain public and fiduciary deposits in
the ordinary course of business, none of the investments
reflected in the consolidated balance sheet of the Company
included in the Company's Report on Form 10-Q for the quarter
ended September 30, 1998 and none of the investment securities
held by it or any of its Subsidiaries since September 30, 1998 is
subject to any restriction (contractual or statutory) that would
materially impair the ability of the entity holding such
investment freely to dispose of such investment at any time.
(b) Neither the Company nor any Subsidiary is a party to or
has agreed to enter into an exchange-traded or over the-counter
equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that
is not included on the consolidated statements of condition and
is a derivative contract (including various combinations <PAGE> thereof)
(each, a "Derivatives Contract") or owns securities that (A) are
referred to generically as "structured notes," "high risk
mortgage derivatives," "capped floating rate notes" or "capped
floating rate mortgage derivatives" or (B) are likely to have
changes in value as a result of interest or exchange rate changes
that significantly exceed normal changes in value attributable to
interest or exchange rate changes, except for those Derivatives
Contracts and other instruments legally purchased or entered into
in the ordinary course of business, consistent with regulatory
requirements and listed (as of the date hereof) in Section
4.25(b) of the Company Disclosure Schedule or disclosed in any
Company Reports filed on or prior to the date hereof.
(c) Set forth in Section 4.25(c) of the Company Disclosure
Schedule is a true and correct list of the Company's borrowed
funds (excluding deposit accounts) as of the date hereof.
(d) None of the deposits of the Company or any of its
Subsidiaries is a "brokered" deposit.
4.26 INDEMNIFICATION. Except as provided in the Company
Contracts or the Restated Certificate of Incorporation or Bylaws
of the Company, neither the Company nor any Company Subsidiary is
a party to any indemnification agreement with any of its present
or former directors, officers, employees, agents or other persons
who serve or served in any other capacity with any other
enterprise at the request of the Company (a "Covered Person"),
and, to the best knowledge of the Company, there are no claims
for which any Covered Person would be entitled to indemnification
under the Restated Certificate of Incorporation or Bylaws of the
Company or any Subsidiary of the Company, applicable law or
regulation or any indemnification agreement.
4.27 YEAR 2000 MATTERS. Section 4.27 of the Company
Disclosure Schedule contains a true and correct copy of the
Company's plan for addressing year 2000 computer issues (the
"Year 2000 Plan"). The Company is in compliance with the
Company's Year 2000 Plan. The Company Bank has been examined by
the OCC with respect to being "Year 2000 Compliant" and neither
the Company nor the Company Bank has received any written
communication from the OCC commenting adversely with respect to
the ability of the Company Bank to become Year 2000 compliant.
4.28. UNDISCLOSED LIABILITIES. Except (a) for those
liabilities that are fully reflected or reserved against on the
consolidated balance sheet of the Company as of September 30,
1998 and (b) for liabilities incurred in the ordinary course of
business consistent with past practice since September 30, 1998
that, either alone or when combined with all similar liabilities,
have not had, and could not reasonably be expect to have, a
Material Adverse Effect on the Company, neither the Company nor
any of its Subsidiaries has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise
and whether due or to become due).
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ICBC
Subject to Article III, ICBC hereby represents and warrants
to the Company (subject to the ICBC Disclosure Schedule) as
follows:
5.1 CORPORATE ORGANIZATION. (a) ICBC is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. ICBC has the corporate power and
authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in
which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary. ICBC is duly
registered as a savings and loan holding company under the HOLA.
The Certificate of Incorporation and Bylaws of ICBC, copies of
which have previously been delivered to the Company, are true and
correct copies of such documents as in effect as of the date of
this Agreement.
(b) Independence Community Bank ("ICBC Bank") is a stock
savings bank duly organized, validly existing and in good
standing under the laws of the State of New York. The deposit
accounts of ICBC Bank are insured by the FDIC through the BIF and
the Savings Association Insurance Fund to the fullest extent
permitted by law, and all premiums and assessments required in
connection therewith have been paid when due. Each of ICBC's
other Subsidiaries which is a "Significant Subsidiary" (each a
"Significant Subsidiary" and together the "Significant
Subsidiaries") as such term is defined in Regulation S-X
promulgated by the SEC is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation. Each Significant Subsidiary of ICBC has the
corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties
and assets owned or leased by it makes such licensing or
qualification necessary. The Restated Organization Certificate,
Bylaws and other similar governing documents of ICBC Bank, copies
of which have previously been delivered to the Company, are true
and correct copies of such documents as in effect as of the date
of this Agreement.
(c) The minute books of ICBC and each of its Significant
Subsidiaries contain true and correct records of all meetings and
other corporate actions held or taken since December 31, 1995 of
their respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
5.2 CAPITALIZATION. (a) As of the date of this Agreement,
the authorized capital stock of ICBC consists of 125,000,000
shares of ICBC Common Stock and 25,000,000 shares of preferred
stock, par value $0.01 per share ("ICBC Preferred Stock"). As of
the date hereof, there were 71,421,563 shares of ICBC Common
Stock and no shares of ICBC Preferred Stock issued and
outstanding, and 4,622,187 shares of ICBC Common Stock held in
ICBC's treasury. As of the date of this Agreement, no shares of
ICBC Common Stock or ICBC Preferred Stock were <PAGE> reserved for
issuance, except that 7,041,088 shares of ICBC Common Stock were
reserved for issuance upon the exercise of stock options pursuant
to the Independence Community Bank Corp. 1998 Stock Option Plan
(the "ICBC Stock Plan"). All of the issued and outstanding
shares of ICBC Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except as referred to
above or reflected in Section 5.2(a) of the ICBC Disclosure
Schedule, ICBC does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance
of any shares of ICBC Common Stock or ICBC Preferred Stock or any
other equity securities of ICBC or any securities representing
the right to purchase or otherwise receive any shares of ICBC
Common Stock or ICBC Preferred Stock. The shares of ICBC Common
Stock to be issued pursuant to the Merger will be duly authorized
and validly issued and, at the Effective Time, all such shares
will be fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof.
(b) Section 5.2(b) of the ICBC Disclosure Schedule sets
forth a true and correct list of all of the ICBC Subsidiaries as
of the date of this Agreement. Except as set forth in Section
5.2(b) of the ICBC Disclosure Schedule, as of the date of this
Agreement, ICBC owns, directly or indirectly, all of the issued
and outstanding shares of capital stock of each of the
Subsidiaries of ICBC, free and clear of all liens, charges,
encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of
this Agreement, no Subsidiary of ICBC has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character with any party that is not a
direct or indirect Subsidiary of ICBC calling for the purchase or
issuance of any shares of capital stock or any other equity
security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital
stock or any other equity security of such Subsidiary.
5.3 AUTHORITY; NO VIOLATION. (a) ICBC has full corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of ICBC, and no other
corporate proceedings on the part of ICBC are necessary to
approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by ICBC and (assuming due authorization,
execution and delivery by the Company) this Agreement constitutes
a valid and binding obligation of ICBC, enforceable against ICBC
in accordance with its terms, except as enforcement may be
limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies
generally.
(b) ICBC Bank has full corporate power and authority to
execute and deliver the Bank Merger Agreement and to consummate
the transactions contemplated thereby. The execution and
delivery of the Bank Merger Agreement and the consummation of the
transactions contemplated <PAGE> thereby will be duly and validly
approved by the Board of Directors of ICBC Bank. Upon the due
and valid approval of the Bank Merger Agreement by ICBC, as the
sole stockholder of ICBC Bank, and by the Board of Directors of
ICBC Bank, no other corporate proceedings on the part of ICBC
Bank will be necessary to consummate the transactions
contemplated thereby. The Bank Merger Agreement, upon execution
and delivery by ICBC Bank, will be duly and validly executed and
delivered by ICBC Bank and will (assuming due authorization,
execution and delivery by ICBC Bank) constitute a valid and
binding obligation of ICBC Bank, enforceable against ICBC Bank in
accordance with its terms, except as enforcement may be limited
by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally.
(c) Except as set forth in Section 5.3(b) of the ICBC
Disclosure Schedule, neither the execution and delivery of this
Agreement by ICBC or the Bank Merger by ICBC Bank, nor the
consummation by ICBC of the transactions contemplated hereby or
thereby, nor compliance by ICBC with any of the terms or
provisions hereof or thereof, will (i) violate any provision of
the Certificate of Incorporation or Bylaws of ICBC, or the
restated organization certificate, articles of incorporation or
bylaws or similar governing documents of any of its Subsidiaries
or (ii) assuming that the consents and approvals referred to in
Section 5.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to ICBC or any of its Subsidiaries or any
of their respective properties or assets, or (y) violate,
conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the
respective properties or assets of ICBC or any of its
Subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which ICBC
or any of its Subsidiaries is a party, or by which they or any of
their respective properties or assets may be bound or affected
except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which either individually or in
the aggregate will not have or be reasonably likely to have a
material adverse effect on ICBC's ability to consummate the
transactions contemplated hereby or ICBC Bank's ability to
consummate the transactions contemplated by the Bank Merger
Agreement.
5.4 CONSENTS AND APPROVALS. Except for (a) the filing of
applications and notices, as applicable, with the OTS under the
HOLA and the rules and regulations of the OTS, the FDIC under the
Bank Merger Act and the Federal Deposit Insurance Act and the
rules and regulations of the FDIC, and, if applicable, filing of
applications and notices with the FRB and the OCC, and approval
of such applications and notices, (b) the State Banking
Approvals, (c) the filing with the SEC of the Proxy Statement and
the filing and declaration of effectiveness of the Form S-4, (d)
the filing of the Certificate of Merger with the Secretaries
pursuant to the DGCL and the NJBCA, (e) such filings and
approvals as are required to be made or obtained under the
securities or "Blue Sky" laws of various states in connection
with the issuance of the shares of ICBC Common Stock <PAGE> pursuant to
this Agreement, (f) approval of the listing for quotation of the
ICBC Common Stock to be issued in the Merger on the Nasdaq/NMS,
and (g) such other filings, authorizations or approvals as may be
set forth in Section 5.4 of the ICBC Disclosure Schedule, no
consents or approvals of or filings or registrations with any
Governmental Entity or of or with any third party are necessary
in connection with (1) the execution and delivery by ICBC of this
Agreement and (2) the consummation by ICBC of the Merger and the
other transactions contemplated hereby.
5.5 REPORTS. ICBC and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with
any amendments required to be made with respect thereto, that
they were required to file since December 31, 1995 with any
Regulatory Agency, and have paid all fees and assessments due and
payable in connection therewith. Except for normal examinations
conducted by a Regulatory Agency in the regular course of the
business of ICBC and its Subsidiaries, and except as set forth in
Section 5.5 of the ICBC Disclosure Schedule, no Regulatory Agency
has initiated any proceeding or, to the knowledge of ICBC,
investigation into the business or operations of ICBC or any of
its Subsidiaries since December 31, 1995. There is no unresolved
violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations
of ICBC or any of its Subsidiaries.
5.6 FINANCIAL STATEMENTS. ICBC has previously made
available to the Company copies of (a) the consolidated
statements of financial condition of ICBC and its Subsidiaries as
of March 31 for the fiscal years 1997 and 1998 and the related
consolidated statements of operations, changes in stockholders'
equity and cash flows for the fiscal years 1996, 1997 and 1998,
inclusive, as reported in ICBC's Annual Report on Form 10-K for
the fiscal year ended March 31, 1998 filed with the SEC under the
Exchange Act, in each case accompanied by the audit report of
Ernst & Young LLP, independent public accountants with respect to
ICBC, and (b) the unaudited consolidated statement of financial
condition of ICBC and its Subsidiaries as of September 30, 1998
and the related unaudited consolidated statements of operations,
changes in stockholders' equity and cash flows for the six-month
periods then ended as reported in ICBC's Quarterly Report on Form
10-Q for the period ended September 30, 1998 filed with the SEC
under the Exchange Act. The March 31, 1998 consolidated statement
of financial condition of ICBC (including the related notes,
where applicable) fairly presents the consolidated financial
condition of ICBC and its Subsidiaries as of the date thereof,
and the other financial statements referred to in this Section
5.6 (including the related notes, where applicable) fairly
present and the financial statements to be filed with the SEC
after the date hereof will fairly present (subject, in the case
of the unaudited statements, to recurring audit adjustments
normal in nature and amount), the results of the consolidated
operations and changes in stockholders' equity and consolidated
financial condition of ICBC and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein
set forth; each of such statements (including the related notes,
where applicable) complies, and the financial statements to be
filed with the SEC after the date hereof will comply in all
material respects, with applicable accounting requirements and
with the published rules and regulations of the SEC with respect
thereto; and each of such statements (including the related
notes, where applicable) has been, and the financial statements
to be filed with the SEC after the date hereof will be, prepared
in accordance in all material respects with <PAGE> GAAP consistently
applied during the periods involved, except as indicated in the
notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of ICBC and its
Significant Subsidiaries have been, and are being, maintained in
accordance in all material respects with GAAP and any other
applicable legal and accounting requirements.
5.7 BROKER'S FEES. Neither ICBC nor any Subsidiary of
ICBC, nor any of their respective officers or directors, has
employed any broker or finder or incurred any liability for any
broker's fees, commissions or finder's fees in connection with
any of the transactions contemplated by this Agreement, except
that ICBC has engaged, and will pay a fee or commission to,
Merrill Lynch & Co. ("Merrill Lynch").
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as may be
disclosed in any ICBC Report (as defined in Section 5.12) filed
with the SEC prior to the date of this Agreement, since September
30, 1998, there has been no change or development or combination
of changes or developments which, individually or in the
aggregate, has had a Material Adverse Effect on ICBC.
5.9 LEGAL PROCEEDINGS. As of the date of this Agreement,
there are no judicial, administrative, arbitral or other actions,
suits, proceeding or investigations pending or, to ICBC's
knowledge, threatened, against ICBC or any of its Subsidiaries
which, if adversely determined. would materially adversely affect
the ability of ICBC to consummate the transactions contemplated
hereby. As of the date of this Agreement, to the best of ICBC's
knowledge, there is no reasonable basis for any other proceeding,
claim, action or governmental investigation against ICBC or any
Subsidiary, except such proceedings, claims, actions or
governmental investigations which would not have a material
adverse effect on the ability of ICBC to consummate the
transactions contemplated hereby.
5.10 TAXES. Except as set forth in Section 5.10 of the ICBC
Disclosure Schedule, each of ICBC and its Subsidiaries has (i)
duly and timely filed and will duly and timely file (including
applicable extensions granted without penalty) all material Tax
Returns required to be filed at or prior to the Effective Time,
and such Tax Returns are true and correct in all material
respects, and (ii) paid in full or made adequate provision in the
financial statements of ICBC (in accordance with GAAP) for all
material Taxes shown to be due on such Tax Returns. Except as set
forth in Section 5.10 of the ICBC Disclosure Schedule, (i) as of
the date hereof, neither ICBC nor any of its Subsidiaries has
requested any extension of time within which to file any Tax
Returns in respect of any fiscal year which have not since been
filed and no request for waivers of the time to assess any Taxes
are pending or outstanding, and (ii) as of the date hereof, with
respect to each taxable period of ICBC and its Subsidiaries, the
federal and state income Tax Returns of ICBC and its Subsidiaries
have been audited by the Internal Revenue Service or appropriate
state tax authorities or the time for assessing and collecting
income Tax with respect to such taxable period has closed and
such taxable period is not subject to review. Except as set forth
in Section 5.10 of the ICBC Disclosure Schedule, neither ICBC nor
any of its Subsidiaries (i) has made an election under Section
341(f) of the Code, (ii) has issued or assumed any obligation
under Section 279 of <PAGE> the Code, any high yield discount obligation
as described in Section 163f(i) of the Code or any registration-
required obligation within the meaning of Section 163f(2) of the
Code that is not in registered form, (iii) has made any payment,
is obligated to make payment, or is party to any agreement that
could obligate it to make any payment that would not be
deductible under Section 280G of the Code or (iv) is or has been
a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code.
5.11 EMPLOYEES. (a) Section 5.11(a) of the ICBC Disclosure
Schedule sets forth a true and correct list of each deferred
compensation plan, incentive compensation plan, equity
compensation plan, "welfare" plan, fund or program (within the
meaning of Section 3(1) of ERISA); "pension" plan, fund or
program (within the meaning of Section 3(2) of ERISA) that is
sponsored, maintained or contributed to or required to be
contributed to as of the date of this Agreement by, or with
respect to which an obligation or liability exists of (the "ICBC
Plans"), ICBC, any of its Subsidiaries or any trade or business,
whether or not incorporated (an "ICBC ERISA Affiliate"), all of
which together with ICBC would be deemed a "single employer"
within the meaning of Section 4001 of ERISA, for the benefit of
any employee or former employee of ICBC, any Subsidiary or any
ICBC ERISA Affiliate.
(b) Except as set forth in Section 5.11(b) of the ICBC
Disclosure Schedule, each of the ICBC Plans is in compliance in
all material respects with applicable law, including but not
limited to, the Code and ERISA; each of the ICBC Plans intended
to be "qualified" within the meaning of Section 401(a) of the
Code has received a favorable determination letter from the IRS;
no ICBC Plan has an accumulated or waived funding deficiency
within the meaning of Section 412 of the Code; neither ICBC nor
any ICBC ERISA Affiliate has incurred, directly or indirectly,
any liability to or on account of an ICBC Plan pursuant to Title
IV of ERISA (other than PBGC premiums); to the knowledge of ICBC,
no proceedings have been instituted to terminate any ICBC Plan
that is subject to Title IV of ERISA; no "reportable event," as
such term is defined in Section 4043(c) of ERISA, has occurred
with respect to any ICBC Plan (other than a reportable event with
respect to which the thirty day notice period has been waived);
no condition exists that presents a material risk to ICBC of
incurring a liability to or on account of an ICBC Plan pursuant
to Title IV of ERISA; no ICBC Plan is a multiemployer plan
(within the meaning of Section 4001(a)(3) of ERISA and no ICBC
Plan is a multiple employer plan as defined in Section 413 of the
Code; there are no pending or, to the knowledge of ICBC,
threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the ICBC Plans or
any trusts related thereto; the fair market value of the assets
of each ICBC Plan subject to Title IV of ERISA exceeds the
present value of the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) under such ICBC Plan as of the most recent
plan year end prior to the date hereof, calculated using the
actuarial assumptions used in the most recent actuarial valuation
of such Plan as of the date hereof; with respect to each
qualified plan which is an employee stock ownership plan (as
defined in Section 4975(e)(7) of the Code), any assets of any
such plan that are not allocated to participants' individual
accounts are pledged as security for, and may be applied to
satisfy, any securities acquisition indebtedness; and there is
not currently any legally binding commitment by ICBC or any ICBC
ERISA Affiliate to create an additional ICBC Plan or amend <PAGE> any
ICBC Plan (except amendments to comply with law which do not
materially increase the cost of such Plan) and ICBC and its
Subsidiaries do not have any obligations for post-retirement or
post-employment welfare benefits that cannot be amended or
terminated upon sixty days' notice or less without incurring any
liability thereunder, except for coverage required by Part 6 of
Title 1 of ERISA or Section 4980B of the Code, the premium cost
of which is borne (to the extent permitted by law) by the insured
individuals.
5.12 SEC REPORTS. ICBC has previously delivered to the
Company a true and correct copy of each (a) final registration
statement, prospectus, report, schedule and definitive proxy
statement filed since December 31, 1996 by ICBC with the SEC
pursuant to the Securities Act or the Exchange Act (the "ICBC
Reports") and (b) communication mailed by ICBC to its
stockholders since March 13, 1998, and no such registration
statement, prospectus, report, schedule, proxy statement or
communication contained any untrue statement of a material fact
or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading, except that information as of a later date shall be
deemed to modify information as of an earlier date. ICBC has
timely filed all ICBC Reports and other documents required to be
filed by it under the Securities Act and the Exchange Act, and,
as of their respective dates, all ICBC Reports complied in all
material respects with the published rules and regulations of the
SEC with respect thereto.
5.13 ICBC INFORMATION. The information relating to ICBC and
its Subsidiaries to be contained in the Proxy Statement and the
Form S-4, or in any other document filed with any other
regulatory agency in connection herewith, will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The
Proxy Statement (except for such portions thereof that relate
only to the Company or any of its Subsidiaries) will comply with
the provisions of the Exchange Act and the rules and regulations
thereunder. The Form S-4 will comply with the provisions of the
Securities Act and the rules and regulations thereunder.
5.14 COMPLIANCE WITH APPLICABLE LAW. ICBC and each of its
Subsidiaries holds all licenses, franchises, permits and
authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have
complied in all material respect with and are not in default in
any respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity
relating to ICBC or any of its Subsidiaries and neither ICBC nor
any of its Subsidiaries knows of or has received notice of any
violations of any of the above.
5.15 OWNERSHIP OF COMPANY COMMON STOCK. Neither ICBC nor
any of its affiliates or associates (as such terms are defined
under the Exchange Act) beneficially owns, directly or
indirectly, or is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of, any shares of capital stock of the Company (other
than Trust Account Shares and DPC Shares).
<PAGE>
5.16 AGREEMENTS WITH REGULATORY AGENCIES. Neither ICBC nor
any of its Subsidiaries is subject to any cease-and-desist or
other order issued by, or is a party to any written agreement,
consent agreement or memorandum of understanding with, or is a
party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board
resolutions at the request of (each, whether or not set forth in
Section 5.16 of the ICBC Disclosure Schedule, an "ICBC Regulatory
Agreement"), any Governmental Entity that restricts materially
the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its
business, nor has ICBC or any of its Subsidiaries been advised by
any Governmental Entity that it is considering issuing or
requesting any ICBC Regulatory Agreement.
5.17 OPINION. Prior to the execution of this Agreement, ICBC
has received an oral opinion from Merrill Lynch to the effect
that as of the date thereof and based upon and subject to the
matters set forth therein, the Merger Consideration pursuant to
this Agreement is fair from a financial point of view to ICBC.
Such opinion has not been amended or rescinded as of the date of
this Agreement.
5.18 ENVIRONMENTAL MATTERS. (a) Each of ICBC and its
Subsidiaries, each of the Participation Facilities and, to the
best knowledge of ICBC, the Loan Properties (each as hereinafter
defined), are in compliance with Environment Laws and with all
applicable decrees, orders and contractual obligations relating
to pollution or the discharge of, or exposure to, Hazardous
Materials in the environment or workplace;
(b) There is no suit, claim, action, proceeding or
investigation, pending or, to the best knowledge of ICBC,
threatened (or to the best knowledge of ICBC, no past or present
actions activities, circumstances, conditions, events or
incidents that could form the basis of any such suit, claim,
action, proceeding, investigation or notice), before any
Governmental Entity or other forum in which ICBC, any of its
Subsidiaries, any Participation Facility or any Loan Property (or
person or entity whose liability for any such suit, claim,
action, proceeding, investigation or notice ICBC, any of its
Subsidiaries, Participation Facility or Loan Property has or may
have been retained or assumed either contractually or by
operation of law), has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor) with any
Environmental Laws, or (y) relating to the release, threatened
release or exposure to or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Material whether or not
occurring at or on a site owned, leased or operated by ICBC or
any of its Subsidiaries, any Participation Facility or any Loan
Property;
(c) To the best knowledge of ICBC, during the period of
(x) ICBC's or any of its Subsidiaries' ownership or operation of
any of their respective current or former properties, (y) ICBC's
or any of its Subsidiaries' participation in the management of
any Participation Facility, or (z) ICBC's or any of its
Subsidiaries' interest in a Loan Property, there has been no
release of Hazardous Materials in, on, under or affecting any
such property. To the best knowledge of <PAGE> ICBC, prior to the period
of (x) ICBC's or any of its Subsidiaries' ownership or operation
of any of their respective current or former properties, (y)
ICBC's or any of its Subsidiaries' participation in the
management of any Participation Facility, or (z) ICBC's or any of
its Subsidiaries' interest in a Loan Property, there was no
release of Hazardous Materials in, on, under or affecting any
such property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this
Section 5.18: (x) "Hazardous Materials" means any chemicals,
pollutants, contaminants, wastes, hazardous or toxic substances,
petroleum or other regulated substances or materials, (y) "Loan
Property" means any property in which ICBC or any of its
Subsidiaries holds a security interest, and, where required by
the context, said term means the owner or operator of such
property; and (z) "Participation Facility" means any facility in
which ICBC or any of its Subsidiaries participates in the
management and, where required by the context, said term means
the owner or operator of such property.
5.19 LOAN PORTFOLIO. Except as set forth in Section 5.19 of
the ICBC Disclosure Schedule, neither ICBC nor any of its
Subsidiaries is a party to any written or oral Loans, other than
Loans the unpaid principal balance of which does not exceed
$350,000, under the terms of which the obligor was, as of
December 31, 1998, 90 days or more delinquent in payment of
principal or interest or in default of any other provision.
Section 5.19 of the ICBC Disclosure Schedule sets forth (i) all
of the Loans of ICBC or any of its Subsidiaries that as of
December 31, 1998 were classified by any bank examiner (whether
regulatory or internal) as "Other Loans Specially Mentioned",
"Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Credit Risk Assets", "Concerned
Loans", "Watch List" or words of similar import, together with
the principal amount of and accrued and unpaid interest on each
such Loan and the identity of the borrower thereunder, (ii) by
category of Loan (i.e., commercial, consumer, etc.), all of the
other Loans of ICBC and its Subsidiaries that as of December 31,
1998 were classified as nonaccrual, together with the aggregate
principal amount on such Loans by category and (iii) each asset
of ICBC that as of December 31, 1998 was classified as "Other
Real Estate Owned" and the book value thereof.
5.20 INSURANCE. ICBC and its Subsidiaries are presently
insured, and since December 31, 1995 have been insured, for
reasonable amounts with financially sound and reputable insurance
companies, against such risks as companies engaged in a similar
business would, in accordance with good business practice,
customarily be insured. All of the insurance policies and bonds
maintained by ICBC and its Subsidiaries are in full force and
effect, ICBC and its Subsidiaries are not in default thereunder
and all material claims thereunder have been filed in due and
timely fashion.
5.21 YEAR 2000 MATTERS. Section 5.21 of the ICBC
Disclosure Schedule contains a true and correct copy of ICBC's
plan for addressing year 2000 computer issues (the "Year 2000
Plan"). ICBC is in compliance with ICBC's Year 2000 Plan. ICBC
Bank has been examined by the FDIC with respect to being "Year
2000 Compliant" and neither ICBC nor ICBC Bank has <PAGE> received any
written communication from the FDIC commenting adversely with
respect to the ability of ICBC Bank to become Year 2000
compliant.
5.22 APPROVALS. As of the date of this Agreement, ICBC knows
of no reason why all regulatory approvals required for the
consummation of the transactions contemplated hereby (including,
without limitation, the Merger and the Bank Merger) should not be
obtained.
5.23 REORGANIZATION. ICBC has no reason to believe that the
Merger will fail to qualify as a reorganization under Section
368(a) of the Code.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 COVENANTS OF THE COMPANY. Except as expressly provided
in this Agreement, during the period from the date of this
Agreement to the Effective Time, the Company shall use
commercially reasonable efforts to, and shall cause its
Subsidiaries to use commercially reasonable efforts to, (i)
conduct its business in the ordinary and usual course consistent
with past practices and prudent banking practice; (ii) maintain
and preserve intact its business organization, properties,
leases, employees and advantageous business relationships and
retain the services of its officers and key employees, (iii) take
no action which would adversely affect or delay the ability of
the Company, the Company Bank, ICBC or ICBC Bank to perform its
covenants and agreements on a timely basis under this Agreement,
and (iv) take no action which would adversely affect or delay the
ability of the Company, the Company Bank, ICBC or ICBC Bank to
obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any
such approvals, consents or waivers containing any material
condition or restriction. Without limiting the generality of the
foregoing, and except as set forth in Section 6.1 of the Company
Disclosure Schedule or as otherwise specifically provided by this
Agreement or consented to in writing by ICBC, the Company shall
not, and shall not permit any of its Subsidiaries to:
(a) solely in the case of the Company, declare or pay
any dividends on, or make other distributions in respect of, any
of its capital stock, other than normal quarterly dividends not
in excess of $0.12 per share of Company Common Stock;
(b) (i) repurchase, redeem or otherwise acquire
(except for the acquisition of Trust Account Shares and DPC
Shares, as such terms are defined in Section 1.4(b) hereof) any
shares of the capital stock of the Company or any Subsidiary of
the Company, or any securities convertible into or exercisable
for any shares of the capital stock of the Company or any
Subsidiary of the Company, (ii) split, combine or reclassify any
shares of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (iii) issue,
deliver or sell, or authorize or propose the issuance, delivery
or sale of, any shares of its capital stock or any securities
convertible into or <PAGE> exercisable for, or any rights, warrants or
options to acquire, any such shares, or enter into any agreement
with respect to any of the foregoing, except, in the case of
clauses (ii) and (iii), for the issuance of Company Common Stock
upon the exercise or fulfillment of rights or options issued or
existing or grants made pursuant to the Company Option Plans or
the LCAP, all to the extent outstanding and in existence on the
date of this Agreement as set forth in the Company Disclosure
Schedule and in accordance with their present terms;
(c) amend its certificate of incorporation, articles
of association or bylaws or other similar governing documents;
(d) (i) initiate, solicit or encourage, directly or
indirectly, any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to
stockholders of the Company) with respect to a merger,
consolidation or similar transaction involving, or any purchase,
lease or other acquisition of, all or more than 10% of the assets
or any equity securities of the Company or any of its
Subsidiaries (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal"), (ii) engage in any
negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to
an Acquisition Proposal, or (iii) authorize or permit any of its
directors, officers, employees or agents to directly or
indirectly engage in any of the activities specified in clauses
(i) or (ii); provided, however, that nothing contained in this
Agreement shall prevent the Company or its Board of Directors
from engaging in any negotiations or discussions with, or
providing any confidential information or data to, any person who
has made an unsolicited bona fide written Acquisition Proposal,
if and only to the extent that, in each such case referred to
above, (A) the Board of Directors of the Company, based upon
written advice of outside legal counsel, in good faith deems such
action to be legally necessary for the proper discharge of its
fiduciary duties under applicable law and (B) the Board of
Directors of the Company determines in good faith (based upon
written advice of its financial advisor) that such Acquisition
Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects
of the Acquisition Proposal and the person making the Acquisition
Proposal and would, if consummated, result in a more favorable
transaction than the transaction contemplated by this Agreement;
provided further, however, that the Company may communicate
information about any such Acquisition Proposal to its
stockholders if, in the judgment of the Company's Board of
Directors, based upon the written advice of outside counsel, such
communication is required under applicable law. The Company will
notify ICBC immediately orally (within one day) and in writing
(within three days) if any such inquiries, proposals or offers
are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or
continued with the Company after the date hereof, and the
identity of the person making such inquiry, proposal or offer and
the substance thereof and will keep ICBC informed of any
developments with respect thereto immediately upon occurrence
thereof. Subject to the foregoing, the Company will immediately
cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. The Company and its
Subsidiaries will take the necessary steps to inform their
respective officers, directors, agents, and representatives
(including, without limitation, any <PAGE> investment banker, attorney
or accountant retained by it) of the obligations undertaken in
this Section 6.1(d). The Company will promptly request each
person (other than ICBC) that has executed a confidentiality
agreement prior to the date hereof in connection with its
consideration of a business combination with the Company or any
of its Subsidiaries to return or destroy all confidential
information previously furnished to such person by or on behalf
of the Company or any of its Subsidiaries. The Company shall take
all steps reasonably necessary to enforce all such
confidentiality agreements;
(e) make any capital expenditures other than those
which (i) are made in the ordinary course of business or are
necessary to maintain existing assets in good repair, (ii) are
set forth in Section 6.1(e) of the Company Disclosure Schedule,
and (iii) in any event (excluding those expenditures set forth in
Section 6.1(e) of the Company Disclosure Schedule) are in an
amount of no more than $100,000 in the aggregate;
(f) enter into any new line of business;
(g) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire any assets, which would be material,
individually or in the aggregate, to the Company, other than in
connection with foreclosures, settlements in lieu of foreclosure
or troubled loan or debt restructurings in the ordinary course of
business consistent with past practices;
(h) take any action that is intended or may reasonably
be expected to result in any of the conditions to the Merger set
forth in Article VIII not being satisfied;
(i) change its methods of accounting in effect at
September 30, 1998, except as required by changes in GAAP or
regulatory accounting principles as concurred in writing by the
Company's independent auditors;
(j) (i) except as required by applicable law or as
required to maintain qualification pursuant to the Code, adopt,
amend or terminate any employee benefit plan (including, without
limitation, any Plan) or any agreement, arrangement, plan, trust,
other funding arrangement or policy between the Company or any
Subsidiary of the Company and one or more of its current or
former directors, officers, employees or independent contractors
except as required pursuant to irrevocable commitments existing
on the date of this Agreement, change any trustee or custodian of
the assets of any plan or transfer plan assets among trustees or
custodians, (ii) increase or accelerate payment of in any manner
the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any Plan or agreement
as in effect as of the date hereof, except (A) as may be required
pursuant to binding commitments existing on the date hereof as
set forth in Section 4.15 of the Company Disclosure Schedule,
(B) as may be required by applicable law, and (C) in the case of
employees who are not officers at the level of Vice <PAGE> President or
above, normal salary increases in the ordinary course of business
consistent with past practice, or (iii) grant or award any stock
options, stock appreciation rights, restricted stock, restricted
stock units, performance units or shares or awards under the LCAP
(provided, however that the awards for a maximum of 28,698 shares
of Company Common Stock under the current three year cycle of the
LCAP may be prorated pursuant to Section 4.8 of the LCAP);
(k) other than activities in the ordinary course of
business consistent with past practice, sell, lease, encumber,
assign or otherwise dispose of, or agree to sell, lease,
encumber, assign or otherwise dispose of, any of its material
assets, properties or other rights or agreements except as
otherwise specifically contemplated by this Agreement;
(l) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for
borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual, corporation or other entity;
(m) file any application to relocate or terminate the
operations of any banking office of it or any of its
Subsidiaries;
(n) create, renew, amend or terminate or give notice
of a proposed renewal, amendment or termination of, any
employment, consulting or severance agreement or of any material
contract, agreement or lease for goods, services or office space
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or their respective
properties is bound, other than the renewal in the ordinary
course of business of any lease the term of which expires prior
to the Closing Date;
(o) other than in the ordinary course of business
consistent with past practice, in individual amounts not to
exceed $100,000, and other than investments for the Company's
portfolio made in accordance with Section 6.1(p), make any
investment either by purchase of stock or securities,
contributions to capital, property transfers or purchase of any
property or assets of any other individual, corporation or other
entity;
(p) make any investment in any debt security,
including mortgage-backed and mortgage related securities, other
than U.S. government and U.S. government agency securities with
final maturities not greater than five years or mortgage-backed
or mortgage related securities which would not be considered
"high risk" securities under applicable regulatory
pronouncements, that are purchased in the ordinary course of
business consistent with past practice;
(q) enter into or terminate any contract or agreement,
or make any change in any of its leases or contracts, other than
with respect to those involving aggregate payments of less than,
or the provision of goods or services with a market value of less
than, $100,000 per annum and other than contracts or agreements
covered by Section 6.1(t);
<PAGE>
(r) settle any claim, action or proceeding involving
any liability of the Company or any of its Subsidiaries for money
damages in excess of $100,000 or involving any material
restrictions upon the operations of the Company or any of its
Subsidiaries;
(s) except in the ordinary course of business and in
amounts less than $100,000, waive or release any material right
or collateral or cancel or compromise any extension of credit or
other debt or claim;
(t) (i) make or commit to make any new loan or other
extension of credit in an amount of $300,000 or more, renew for a
period in excess of one year any existing loan or other extension
of credit in an amount of $300,000 or more, or increase by
$300,000 or more the aggregate credit outstanding to any borrower
or group of affiliated borrowers, except such loan originations,
commitments, extensions, renewals or increases that have been
reviewed by ICBC, or (ii) make, renegotiate, renew, increase,
extend, modify or purchase any loan, lease (credit equivalent),
advance, credit enhancement or other extension of credit, or make
any commitment in respect of any of the foregoing, other than in
the ordinary course of business consistent with past practice and
in strict compliance with the Company's current Board-approved
loan policies as in effect on the date hereof;
(u) incur any additional borrowings beyond those set
forth in the Company Disclosure Schedule other than short-term
(with a final maturity of two years or less) Federal Home Loan
Bank borrowings and reverse repurchase agreements consistent with
past practice, or pledge any of its assets to secure any
borrowings other than as required pursuant to the terms of
borrowings of the Company or any Subsidiary in effect at the date
hereof or in connection with borrowings or reverse repurchase
agreements permitted hereunder. Deposits shall not be deemed to
be borrowings within the meaning of this paragraph;
(v) make any investment or commitment to invest in
real estate or in any real estate development project, other than
real estate acquired in satisfaction of defaulted mortgage loans
and investments or commitments approved by the Board of Directors
of the Company prior to the date of this Agreement and disclosed
in writing to ICBC, provided, however, the Company shall not take
any further action with respect to the loans and properties set
forth in Section 4.17 of the Company Disclosure Schedule without
the prior consent of ICBC;
(w) except pursuant to commitments existing at the
date hereof which have previously been disclosed in writing to
the ICBC, make any real estate loans secured by undeveloped land
or real estate located outside the State of New Jersey;
(x) establish or make any commitment relating to the
establishment of any new branch or other office facilities other
than those for which all regulatory approvals have been obtained;
with respect to any such new branch or other office facility for
which regulatory approval has been received, make any capital
expenditures that in the aggregate would exceed $50,000, other
than as set forth in Section 6.1(x) of the Company Disclosure
Schedule;
<PAGE>
(y) organize, capitalize, lend to or otherwise invest
in any Subsidiary, or invest in or acquire a 10% or greater
equity or voting interest in any firm, corporation or business
enterprise;
(z) appoint or nominate for election to the Board of
Directors of the Company any person who is not a member of the
Board of Directors of the Company as of the last Company Report;
or
(aa) agree to do any of the foregoing.
6.2 COVENANTS OF ICBC. Except as expressly provided in
this Agreement, during the period from the date of this Agreement
to the Effective Time, ICBC shall use commercially reasonable
efforts to, and shall cause its Subsidiaries to use commercially
reasonable efforts to, (i) conduct its business in the ordinary
and usual course consistent with past practices and prudent
banking practice, (ii) maintain and preserve intact its business
organization, properties, leases, employees and advantageous
business relationships and retain the services of its officers
and key employees, (iii) take no action which would adversely
affect or delay the ability of the Company or ICBC to perform
its covenants and agreements on a timely basis under this
Agreement, and (iv) take no action which would adversely affect
or delay the ability of the Company, ICBC, the Company Bank or
ICBC Bank to obtain any necessary approvals, consents or waivers
of any governmental authority required for the transactions
contemplated hereby or which would reasonably be expected to
result in any such approvals, consents or waivers containing any
material condition or restriction. Without limiting the
generality of the foregoing, and except as set forth in Section
6.2 of the ICBC Disclosure Schedule or as otherwise specifically
provided by the Agreement or consented to in writing by the
Company, ICBC shall not, and shall not permit any of its
Subsidiaries to:
(a) solely in the case of ICBC, declare or pay any
dividends on or make any other distributions in respect of any of
its capital stock other than its regular quarterly dividends;
(b) take any action that is intended or may reasonably
be expected to result in any of the conditions to the Merger set
forth in Article VIII not being satisfied;
(c) change its methods of accounting in effect at
September 30, 1998, except in accordance with changes in GAAP or
regulatory accounting principles as concurred in by ICBC's
independent auditors;
(d) repurchase any of the ICBC Common Stock during the
Pricing Period or the three (3) consecutive trading days
immediately preceding the commencement of the Pricing Period; or
(e) agree to do any of the foregoing.
<PAGE>
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 REGULATORY MATTERS. (a) Within forty-five days after
the date hereof or as soon as thereafter as is reasonably
practicable, ICBC and the Company shall promptly prepare and file
with the SEC the Proxy Statement and ICBC shall promptly prepare
and file with the SEC the Form S-4, in which the Proxy Statement
will be included as a part of the prospectus contained therein.
Each of the Company and ICBC shall use its reasonable best
efforts to have the Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing, and
the Company shall thereafter mail the Proxy Statement to its
stockholders. ICBC shall also use its reasonable best efforts to
obtain all necessary state securities law or "Blue Sky" permits
and approvals required to carry out the transactions contemplated
by this Agreement.
(b) The parties hereto shall cooperate with each other
and use their reasonable best efforts to prepare and file within
forty-five (45) days after the date hereof or as soon as
thereafter as is reasonably practicable, all necessary
documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all permits,
consents, approvals and authorizations of all third parties and
Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement
(including without limitation the Merger and the Bank Merger).
The Company and ICBC shall have the right to review in advance,
and to the extent practicable each will consult the other on, in
each case subject to applicable laws relating to the exchange of
information, all the information relating to the Company or ICBC,
as the case may be, and any of their respective Subsidiaries,
which appear in any filing made with, or written materials
submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement.
In exercising the foregoing right, each of the parties hereto
shall act reasonably and as promptly as practicable. The parties
hereto agree that they will consult with each other with respect
to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities
necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to completion of the
transactions contemplated herein.
(c) ICBC and the Company shall, upon request, furnish
each other with all information concerning themselves, their
Subsidiaries, directors, officers and stockholders and such other
matters as may be reasonably necessary or advisable in connection
with the Proxy Statement, the Form S-4 or any other statement,
filing, notice or application made by or on behalf of ICBC, the
Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement.
(d) ICBC and the Company shall promptly furnish each
other with copies of written communications received by ICBC or
the Company, as the case may be, or any of their <PAGE> respective
Subsidiaries, Affiliates or Associates (as such terms are defined
in Rule 12b-2 under the Exchange Act as in effect on the date of
this Agreement) from, or delivered by any of the foregoing to,
any Governmental Entity in respect of the transactions
contemplated hereby.
7.2 ACCESS TO INFORMATION. (a) Upon reasonable notice and
subject to applicable laws relating to the exchange of
information, each party shall, and shall cause each of its
Subsidiaries to, afford to the officers, employees, accountants,
counsel and other representatives of the other party, access,
during normal business hours during the period prior to the
Effective Time, to all its properties, books, contracts,
commitments, records, officers, employees, accountants, counsel
and other representatives and, during such period, it shall, and
shall cause its Subsidiaries to, make available to the other
party all information concerning its business, properties and
personnel as the other party may reasonably request.
Neither party nor any of its Subsidiaries shall be required
to provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of its
customers, jeopardize any attorney- client privilege or
contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate
substitute disclosure arrangements under circumstances in which
the restrictions of the preceding sentence apply.
(b) All information furnished pursuant to Section
7.2(a) shall be subject to, and each of the Company and ICBC
shall hold all such information in confidence in accordance with,
the provisions of the confidentiality agreement, dated November
5, 1998 (the "Confidentiality Agreement"), between ICBC and the
Company.
(c) No investigation by either of the parties or their
respective representatives shall affect the representations,
warranties, covenants or agreements of the other set forth
herein.
7.3 STOCKHOLDER MEETING. The Company shall take all steps
necessary to duly call, give notice of, convene and hold a
meeting of its stockholders to be held as soon as is reasonably
practicable after the date on which the Form S-4 becomes
effective for the purpose of voting upon the approval and
adoption of this Agreement and the consummation of the
transactions contemplated hereby. The Company will, through its
Board of Directors, recommend to its stockholders approval of
this Agreement and the transactions contemplated hereby and such
other matters as may be submitted to its stockholders in
connection with this Agreement, unless the Board of Directors
determines, based upon written advice of outside legal counsel,
that the fiduciary duties of such Board preclude it from making
such recommendation. The Company shall engage a nationally
recognized proxy solicitation firm mutually acceptable to the
Company and ICBC to assist the Company in solicitation of the
approval and adoption of the Agreement by its shareholders at the
meeting thereof called to consider the Agreement.
7.4 LEGAL CONDITIONS TO MERGER. Each of ICBC and the
Company shall, and shall cause its Subsidiaries to, use their
reasonable best efforts (a) to take, or cause to be taken, all
<PAGE>
actions necessary, proper or advisable to comply promptly with
all legal requirements which may be imposed on such party or its
Subsidiaries with respect to the Merger and, subject to the
conditions set forth in Article VIII hereof, to consummate the
transactions contemplated by this Agreement and (b) to obtain
(and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party which is required
to be obtained by the Company or ICBC or any of their respective
Subsidiaries in connection with the Merger and the other
transactions contemplated by this Agreement, and to comply with
the terms and conditions of such consent, authorization, order or
approval.
7.5 AFFILIATES. Promptly, but in any event within one week
after the execution and delivery of this Agreement, the Company
shall deliver to ICBC a letter identifying all persons who, to
the knowledge of the Company, may be deemed to be "affiliates" of
the Company under Rule 145 of the Securities Act, including,
without limitation, all directors and executive officers of the
Company, together with executed letter agreements, each
substantially in the form of Exhibit B hereto, executed by each
such person so identified as an affiliate of the Company agreeing
(i) to comply with Rule 145 and (ii) to be present in person or
by proxy and vote in favor of the Merger at the Company's
stockholders' meeting.
7.6 STOCK EXCHANGE LISTING. ICBC shall use its reasonable
best efforts to cause the shares of ICBC Common Stock to be
issued in the Merger to be approved for listing for quotation on
the Nasdaq/NMS, subject to official notice of issuance, as of the
Effective Time.
7.7 EMPLOYEE BENEFIT PLANS; EXISTING AGREEMENTS. (a) As
of or as soon as practicable following the Effective Time, the
employees of the Company and its Subsidiaries (the "Company
Employees") shall become employees of ICBC or a Subsidiary
thereof and shall be eligible to participate in the employee
benefit plans of ICBC and its Subsidiaries in which similarly
situated employees of ICBC or ICBC Bank participate, to the same
extent as similarly situated employees of ICBC or ICBC Bank (it
being understood that inclusion of Company Employees in such
employee benefit plans may occur at different times with respect
to different plans); provided, however, that (i) nothing
contained herein shall require ICBC or any of its Subsidiaries to
make any grants to any Company Employee under either the ICBC
Stock Plan or the ICBC 1998 Recognition and Retention Plan and
Trust Agreement, it being understood that any such grants are
completely discretionary, and (ii) other than as provided in
Section 7.13(b) hereof, nothing contained herein shall require
ICBC or any of its Subsidiaries to permit a Company Employee who
is receiving severance as a result of the transactions
contemplated by this Agreement pursuant to any employment,
severance, consulting or other compensation agreements, plans and
arrangements with the Company or any of its Subsidiaries to
participate in any severance or change in control agreement or
plan offered by ICBC or any of its Subsidiaries. The Company
agrees to take any necessary actions to cease benefit accruals
under any Plan that is a tax-qualified defined benefit plan as of
the Effective Time.
<PAGE>
(b) With respect to each ICBC Plan, for purposes of
determining eligibility to participate, vesting, and vacation
entitlement (but not for accrual of pension benefits), service
with the Company shall be treated as service with ICBC; provided,
however, that such service shall not be recognized to the extent
that such recognition would result in a duplication of benefits.
Such service also shall apply for purposes of satisfying any
waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. Each ICBC
Plan shall waive pre-existing condition limitations to the same
extent waived under the applicable Plan. Company Employees shall
be given credit for amounts paid under a corresponding benefit
plan during the same period for purposes of applying deductibles,
co-payments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the ICBC
Plan during the applicable plan year.
(c) As of the Effective Time, ICBC shall assume and
honor and shall cause the appropriate Subsidiaries of ICBC to
assume and honor in accordance with their terms all employment,
severance, consulting and other compensation agreements, plans
and arrangements existing immediately prior to the execution of
this Agreement which are between the Company or any of its
Subsidiaries and any director, officer or employee thereof and
which have been disclosed in Section 7.7(c) of the Company
Disclosure Schedule. ICBC acknowledges and agrees that (i) the
Merger constitutes a "Change in Control" for all purposes
pursuant to such agreements and arrangements, and (ii) in light
of ICBC's plans relating to management assignments and
responsibilities with respect to the business of ICBC from and
after the Effective Time, each director, officer or employee who
is a party to, or is otherwise subject to, any such agreement or
arrangement will, upon consummation of the Merger, be entitled to
receive the severance or other similar benefits that are provided
thereunder in the event of a termination of employment for "Good
Reason" as defined in such agreements and arrangements (whether
or not such person continues in the employment of ICBC or its
subsidiaries). Any director, officer or employee of the Company
or any of its Subsidiaries who is a party to an agreement set
forth in Section 7.7(c) of the Company Disclosure Schedule shall
be entitled to receive the cash benefits payable under such
agreement within 30 days following the Closing Date; provided,
however, that (i) the amounts payable shall not exceed,
individually or in the aggregate, the amounts reflected in
Section 4.15 of the Company Disclosure Schedule (except to the
extent that any tax indemnification payments in respect of income
and/or excise taxes change due to changes in the assumptions
underlying such amounts) and (ii) the employee executes and
delivers to the Company an instrument in form and substance
satisfactory to ICBC releasing ICBC and its affiliates from any
further liability for monetary payments under such agreement. To
the extent that a director, officer or employee of the Company or
any of its Subsidiaries is entitled to the continued receipt of
miscellaneous fringe benefits pursuant to an agreement set forth
in Section 7.7(c) of the Company Disclosure Schedule, and such
director, officer or employee becomes a director, officer or
employee of ICBC or any of its Subsidiaries following the
Effective Time and as a result becomes entitled to receive
comparable fringe benefits in his or her capacity as a director,
officer or employee of ICBC or any of its Subsidiaries, then the
fringe benefits provided to such person shall be deemed to be
provided in connection with such person's service as a director,
officer or employee of ICBC or any of its Subsidiaries for so
long as such person <PAGE> serves in such capacity and shall be in lieu
of, and not in addition to, any fringe benefits that would have
otherwise been provided pursuant to the agreement set forth in
Section 7.7(c) of the Company Disclosure Schedule.
7.8 INDEMNIFICATION. (a) It is understood and agreed that
after the Effective Time, ICBC shall indemnify and hold harmless,
to the fullest extent that the Company is permitted to indemnify
(including advancement of expenses) its directors and officers
under New Jersey law or OCC regulations, as applicable, and the
Restated Certificate of Incorporation and Bylaws of the Company
as in effect at the Effective Time, any person who is now, or has
been at any time prior to the date of this Agreement, or who
becomes prior to the Effective Time, a director, officer or
employee of the Company or any of its Subsidiaries (the
"Indemnified Parties") against any losses, claims, damages,
liabilities, costs, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of any
claim, suit, proceeding or investigation to each Indemnified
Party), judgments, fines and amounts paid in settlement in
connection with any such threatened or actual claim, action,
suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after the
Effective Time), the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with ICBC;
provided, however, that (1) ICBC shall have the right to assume
the defense thereof and upon such assumption ICBC shall not be
liable to any Indemnified Party for any legal expenses of other
counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except
that if ICBC elects not to assume such defense or counsel for the
Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between ICBC and the
Indemnified Parties, the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with ICBC, and
ICBC shall pay the reasonable fees and expenses of such counsel
for the Indemnified Parties, (2) ICBC shall in all cases be
obligated pursuant to this paragraph to pay for only one firm of
counsel for all Indemnified Parties, (3) ICBC shall not be liable
for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld) and (4) ICBC
shall have no obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in
the manner contemplated hereby is prohibited by applicable law.
Any Indemnified Party wishing to claim Indemnification under this
Section 7.8, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify ICBC thereof,
provided that the failure to so notify shall not affect the
obligations of ICBC under this Section 7.8 except to the extent
such failure to notify materially prejudices ICBC. ICBC's
obligations under this Section 7.8 shall continue in full force
and effect for a period of six years from and after the Effective
Time; provided, however, that all rights to indemnification in
respect of any claim asserted or made within such period shall
continue until the final disposition of such claim.
(b) ICBC shall cause the persons serving as officers
and directors of the Company immediately prior to the Effective
Time to be covered for a period of six years from the Effective
Time by the directors' and officers' liability insurance policy
maintained by the Company <PAGE> (provided that ICBC may substitute
therefor policies of at least the same coverage and amounts
containing terms and conditions which are not less advantageous
than such policy or single premium tail coverage with policy
limits equal to the Company's existing annual coverage limits)
with respect to acts or omissions occurring prior to the
Effective Time which were committed by such officers and
directors in their capacity as such; provided, however, that in
no event shall ICBC be required to expend an aggregate premium
for such six-year period in excess of 200% of the current annual
premiums expended by the Company (the "Insurance Amount") to
maintain or procure insurance coverage, and further provided that
if ICBC is unable to maintain or obtain the insurance called for
by this Section 7.8(b), ICBC shall use all reasonable efforts to
obtain as much comparable insurance as is available for the
Insurance Amount.
(c) In the event ICBC or any of its successors or
assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person,
then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of
ICBC assume the obligations set forth in this Section.
(d) The provisions of this Section 7.8 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs and representatives.
7.9 ADDITIONAL AGREEMENTS. In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement or to vest the Surviving
Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the
Merger, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such
necessary action as may be reasonably requested by ICBC.
7.10 COORDINATION OF DIVIDENDS. After the date of this
Agreement, the Company shall coordinate the declaration of any
dividends in respect of the Company Common Stock and the record
dates and payment dates relating thereto with that of the ICBC
Common Stock, it being the intention of the parties that the
holders of ICBC Common Stock or Company Common Stock shall not
receive more than one dividend, or fail to receive one dividend,
for any single calendar quarter with respect to their shares of
ICBC Common Stock and/or Company Common Stock and any shares of
ICBC Common Stock any holder of Company Common Stock receives in
exchange therefor in the Merger.
7.11 NOTIFICATION OF CERTAIN MATTERS. Each party shall
give prompt notice to the others of (a) any event or notice of,
or other communication relating to, a default or event that, with
notice or lapse of time or both, would become a default, received
by it or any of its Subsidiaries subsequent to the date of this
Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or
results or operations of such party and its Subsidiaries taken as
a whole to which such party or any Subsidiary is a party or is
<PAGE>
subject; and (b) any event, condition, change or occurrence which
individually or in the aggregate has, or which, so far as
reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Event. Each of
the Company and ICBC shall give prompt notice to the other party
of any notice or other communication from any third party
alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this
Agreement.
7.12 CERTAIN MATTERS, CERTAIN REVALUATIONS, CHANGES AND
ADJUSTMENTS. At or before the Effective Time, upon the request
of ICBC, the Company shall, consistent with GAAP, modify and
change its loan, litigation and real estate valuation policies
and practices (including loan classifications and levels of
reserves) so as to be applied consistently on a mutually
satisfactory basis with those of ICBC and establish such accruals
and reserves as shall be necessary to reflect Merger-related
expenses and costs incurred by the Company, provided, however,
that the Company shall not be required to take such action (A)
more than five days prior to the Effective Time, and (B) unless
ICBC agrees in writing that all conditions to closing set forth
in Article VIII have been satisfied or waived (other than those
conditions relating to delivery of documents on the Closing
Date); and provided further, however, that no accrual or reserve
made by the Company or any Company Subsidiary pursuant to this
Section 7.12 or any litigation or regulatory proceeding arising
out of any such accrual or reserve, shall constitute or be deemed
to be a breach, violation of or failure to satisfy any
representation, warranty, covenant, condition or other provision
of this Agreement or otherwise be considered in determining
whether any such breach, violation or failure to satisfy shall
have occurred.
7.13 APPOINTMENTS. (a) Donald M. Karp shall be appointed as
a director and Vice Chairman of the Board of Directors of ICBC as
of the Effective Time, with Mr. Karp to be placed in the class of
directors whose term is scheduled to expire in the year 2002;
provided, however, that if the Effective Time is prior to the
1999 Annual Meeting of Stockholders of ICBC, then Mr. Karp will
be placed in the class of directors scheduled to be elected at
such annual meeting for a three-year term and ICBC agrees to
nominate Mr. Karp for election to the three-year term expiring in
the year 2002; and provided further, that upon the expiration of
his term in the year 2002, the Board of Directors shall nominate
Mr. Karp to serve for an additional term of at least two years.
In addition, Mr. Karp will receive a five-year contract for
services to be actually rendered as a consultant and senior
advisor following the Effective Time, substantially in the form
set forth in Section 7.13(a) of the ICBC Disclosure Schedule.
Mr. Karp shall also be appointed as a director of ICBC Bank as of
the Effective Time, with Mr. Karp to be placed in the class of
directors whose term is scheduled to expire in the year 2002;
provided, however, that if the Effective Time is prior to the
1999 annual meeting of the sole stockholder of ICBC Bank, then
ICBC agrees to elect Mr. Karp for a three-year term expiring in
the year 2002 in its capacity as the sole stockholder of ICBC
Bank; and provided further, that upon the expiration of his term
in the year 2002, ICBC agrees to re-elect Mr. Karp as a director
of ICBC Bank for an additional term of at least two years.
<PAGE>
(b) John A. Dorman shall be appointed as President and
Chief Operating Officer of the Broad National Division of ICBC
Bank as of the Effective Time, with his annual salary to be at
least equal to his annual salary in effect as of the date of this
Agreement, and shall receive a change in control severance
agreement from ICBC Bank substantially in the form set forth in
Section 7.13(b) of the ICBC Disclosure Schedule.
7.14 CHARITABLE CONTRIBUTIONS. ICBC agrees to continue the
Company's charitable contributions in accordance with past
practices and in the aggregate amount set forth in Section 7.14
of the Company Disclosure Schedule for a period of at least 12
months following the Effective Time.
7.15 CONSULTING BOARD. ICBC Bank shall, effective as
of the Effective Time, cause each person serving as a director of
the Company as of the date of this Agreement (other than Donald
M. Karp), if such persons are willing to so serve, to be elected
or appointed as members of a Consulting Board to the Broad
National Division of ICBC Bank ("Consulting Board") to be
established by ICBC Bank, the function of which shall be to
advise ICBC with respect to deposit and lending activities in the
Company's market area and to maintain and develop customer
relationships. The members of the Consulting Board who are
willing to so serve initially shall be elected or appointed for a
term of one year. ICBC Bank agrees to re-elect or re-appoint each
of the initial members of the Consulting Board to an additional
one-year term following the initial one-year term; provided,
however, that ICBC Bank shall have no obligation to re-elect or
re-appoint any member if ICBC Bank reasonably determines that
such member has a conflict of interest that compromises such
member's ability to serve effectively as a member of the
Consulting Board or any cause exists that otherwise would allow
for removal of such person as a director of ICBC Bank if such
person were a member of ICBC Bank's Board of Directors. Each
member of the Consulting Board shall receive a retainer fee for
such service in the amounts set forth in Section 7.15 of the
Company Disclosure Schedule, which fees shall be payable in
quarterly installments or in one lump sum at any time in advance
at the option of ICBC Bank.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the
Merger shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement shall have
been approved and adopted by the requisite vote of the holders of
the outstanding shares of Company Common Stock under applicable
law and the Company's Restated Certificate of Incorporation and
Bylaws.
<PAGE>
(b) Listing of Shares. The shares of ICBC Common Stock
which shall be issued to the stockholders of the Company upon
consummation of the Merger shall have been authorized for listing
for quotation on the Nasdaq/NMS, subject to official notice of
issuance.
(c) Other Approvals. All necessary regulatory or
governmental approvals, consents or waivers required to
consummate the transactions contemplated hereby shall have been
obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired;
and all other consents, waivers and approvals of any third
parties which are necessary to permit the consummation of the
Merger and the other transactions contemplated hereby shall have
been obtained or made except for those the failure to obtain
would not have a Material Adverse Effect (i) on the Company and
its subsidiaries taken as a whole or (ii) on ICBC and its
Subsidiaries taken as a whole. None of the approvals or waivers
referred to herein shall contain any term or condition which
would have a Material Adverse Effect on the Surviving Corporation
and its Subsidiaries, taken as a whole, after giving effect to
the Merger.
(d) Form S-4. The Form S-4 shall have become
effective under the Securities Act and no stop order suspending
the effectiveness of the Form S-4 shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No
order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition
(an "Injunction") preventing the consummation of the Merger shall
be in effect. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced
by any Governmental Entity which prohibits, restricts or makes
illegal consummation of the Merger.
(f) Affiliate Letters. ICBC shall have received the
letter agreements referred to in Section 7.5.
8.2 CONDITIONS TO OBLIGATIONS OF ICBC. The obligation of
ICBC to effect the Merger is also subject to the satisfaction or
waiver by ICBC at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. (i) Subject to
Section 3.2, the representations and warranties of the Company
set forth in this Agreement (other than those set forth in the
first and third sentences of Section 4.1(a), the first two
sentences of Section 4.1(b) and Sections 4.2, 4.6, 4.8(a), 4.10
and 4.18) shall be true and correct as of the date of this
Agreement and (except to the extent such representations <PAGE> and
warranties speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date; and (ii) the
representations and warranties of the Company set forth in the
first and third sentences of Section 4.1(a), the first two
sentences of Section 4.1(b) and Sections 4.2, 4.6, 4.8(a), 4.10
and 4.18 of this Agreement shall be true and correct in all
material respects (without giving effect to Section 3.2 of this
Agreement) as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the
Closing Date. ICBC shall have received a certificate signed on
behalf of the Company by the Chief Executive Officer and the
Chief Financial Officer of the Company to the foregoing effect.
(b) Performance of Obligations of the Company. The
Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement
at or prior to the Closing Date, and ICBC shall have received a
certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company
to such effect.
(c) Federal Tax Opinion. ICBC shall have received an
opinion from Elias, Matz, Tiernan & Herrick L.L.P., counsel to
ICBC ("ICBC's Counsel"), in form and substance reasonably
satisfactory to ICBC, dated the Effective Time, substantially to
the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with
the state of facts existing at the Effective Time, the Merger
will be treated as a reorganization within the meaning of Section
368(a) of the Code and that, accordingly, for federal income tax
purposes:
(i) No gain or loss will be recognized by ICBC or
the Company as a result of the Merger;
(ii) No gain or loss will be recognized by
the stockholders of the Company who exchange all of their Company
Common Stock solely for ICBC Common Stock pursuant to the Merger
(except with respect to cash received in lieu of a fractional
share interest in ICBC Common Stock); and
(iii) The aggregate tax basis of the ICBC
Common Stock received by stockholders who exchange all of their
Company Common Stock solely for ICBC Common Stock pursuant to the
Merger will be the same as the aggregate tax basis of the Company
Common Stock surrendered in exchange therefor (reduced by any
amount allocable to a fractional share interest for which cash is
received).
In rendering such opinion, ICBC's Counsel may require and rely
upon representations and covenants, including those contained in
certificates of officers of ICBC, the Company and others,
reasonably satisfactory in form and substance to such counsel.
(d) Accountant's Letter. The Company shall have caused
to be delivered to ICBC "cold comfort" letters or letters of
procedures from the Company's independent certified public
accountants, dated (i) the date of the mailing of the Proxy
Statement to the Company's stockholders and (ii) a date not
earlier than five business days preceding the Closing Date and
addressed to ICBC, concerning such matters as are customarily
covered in transactions of the type contemplated hereby.
<PAGE>
(e) Approvals. Any and all permits, consents,
waivers, clearances, approvals and authorizations of all
Governmental Entities and third parties which are necessary in
connection with the consummation of the Merger and the Bank
Merger shall have been obtained; provided, however, that no
approval or consent referred to in this Section 8.1(e) shall be
deemed to have been received if it shall include any term,
condition or requirement that, individually or in the aggregate,
(i) would result in a material adverse effect on the results,
business, operation, assets, financial condition or prospects of
ICBC on a consolidated basis, or (ii) would reduce the economic
or business benefits of the transactions contemplated by this
Agreement to ICBC in so significant a manner that ICBC, in its
reasonable judgement, would not have entered into this Agreement.
8.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to effect the Merger is also subject to
the satisfaction or waiver by the Company at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to
Section 3.2, the representations and warranties of ICBC set forth
in this Agreement (other than those set forth in the first and
third sentences of Section 5.1(a), the first two sentences of
Section 5.1(b) and Sections 5.2, 5.6 and 5.8 shall be true and
correct as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the
Closing Date; and (ii) the representations and warranties of ICBC
set forth in the first and third sentences of Section 5.1(a), the
first two sentences of Section 5.1(b) and Sections 5.2, 5.6 and
5.8 of this Agreement shall be true and correct in all material
respects (without giving effect to Section 3.2 of this Agreement)
as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date.
The Company shall have received a certificate signed on behalf of
ICBC by the Chief Executive Officer and the Chief Financial
Officer of ICBC to the foregoing effect.
(b) Performance of Obligations of ICBC. ICBC shall
have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the
Closing Date, and the Company shall have received a certificate
signed on behalf of ICBC by the Chief Executive Officer and the
Chief Financial Officer of ICBC to such effect.
(c) Federal Tax Opinion. The Company shall have
received an opinion from Stinson, Mag & Fizzell P.C. (the
"Company's Counsel"), in form and substance reasonably
satisfactory to the Company, dated the Effective Time,
substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective
Time, the Merger will be treated as a reorganization within the
meaning of Section 368(a) of the Code and that, accordingly, for
federal income tax purposes:
<PAGE>
(i) No gain or loss will be recognized by ICBC or
the Company as a result of the Merger;
(ii) No gain or loss will be recognized by
the stockholders of the Company who exchange all of their
Company Common Stock solely for ICBC Common Stock pursuant to the
Merger (except with respect to cash received in lieu of a
fractional share interest in ICBC Common Stock); and
(iii) The aggregate tax basis of the ICBC
Common Stock received by stockholders who exchange all of their
Company Common Stock solely for ICBC Common Stock pursuant to the
Merger will be the same as the aggregate tax basis of the Company
Common Stock surrendered in exchange therefor (reduced by any
amount allocable to a fractional share interest for which cash is
received).
In rendering such opinion, the Company's Counsel may require and
rely upon representations and covenants, including those
contained in certificates of officers of ICBC, the Company and
others, reasonably satisfactory in form and substance to such
counsel.
(d) Accountant's Letter. ICBC shall have caused to be
delivered to the Company "cold comfort" letters or letters of
procedures from ICBC's independent certified public accountants,
dated (i) the date of the mailing of the Proxy Statement to the
Company's stockholders and (ii) a date not earlier than five
business days preceding the Closing Date and addressed to the
Company, concerning such matters as are customarily covered in
transactions of the type contemplated hereby.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger
by the stockholders of the Company:
(a) by mutual consent of the Company and ICBC in a
written instrument, if the Board of Directors of each so
determines by a vote of a majority of the members of its entire
Board;
(b) by either ICBC or the Company upon written notice
to the other party (i) 30 days after the date on which any
request or application for a Requisite Regulatory Approval shall
have been denied or withdrawn at the request or recommendation of
the Governmental Entity which must grant such Requisite
Regulatory Approval, unless within the 30-day period following
such denial or withdrawal a petition for rehearing or an amended
application has been filed with the applicable Governmental
Entity, provided, however, that no party shall have the <PAGE> right to
terminate this Agreement pursuant to this Section 9.1(b)(i) if
such denial or request or recommendation for withdrawal shall be
due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of
such party set forth herein or (ii) if any Governmental Entity of
competent jurisdiction shall have issued a final nonappealable
order enjoining or otherwise prohibiting the Merger;
(c) by either ICBC or the Company, if its Board of
Directors so determines by a vote of a majority of the members of
its entire Board, if the Merger shall not have been consummated
on or before November 30, 1999, unless the failure of the Closing
to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the
covenants and agreements of such party set forth herein;
(d) by either ICBC or the Company, if its Board of
Directors so determines by a vote of a majority of the members of
its entire Board (provided that if the Company is the terminating
party, it shall not be in material breach of any of its
obligations under Section 7.3) if any approval of the
stockholders of the Company required for the consummation of the
Merger shall not have been obtained by reason of the failure to
obtain the required vote at a duly held meeting of such
stockholders or at any adjournment or postponement thereof;
(e) by either ICBC or the Company, if its Board of
Directors so determines by a vote of a majority of the members of
its entire Board (provided that the terminating party is not then
in material breach of any representation, warranty, covenant or
other agreement contained herein), if there shall have been a
material breach of any of the representations or warranties set
forth in this Agreement on the part of the other party, which
breach is not cured within 30 days following written notice to
the party committing such breach, or which breach, by its nature,
cannot be cured prior to the Closing; provided, however, that
neither party shall have the right to terminate this Agreement
pursuant to this Section 9.1(e) unless the breach of
representation or warranty, together with all other such
breaches, would entitle the party receiving such representation
not to consummate the transactions contemplated hereby under
Section 8.2(a) (in the case of a breach of representation or
warranty by the Company) or Section 8.3(a) (in the case of a
breach of representation or warranty by ICBC);
(f) by either ICBC or the Company, if its Board of
Directors so determines by a vote of a majority of the members of
its entire Board (provided that the terminating party is not then
in material breach of any representation, warranty, covenant or
other agreement contained herein), if there shall have been a
material breach of any of the covenants or agreements set forth
in this Agreement on the part of the other party, which breach
shall not have been cured within 30 days following receipt by the
breaching party of written notice of such breach from the other
party hereto, or which breach, by its nature, cannot be cured
prior to the Closing; or
(g) By the Company, if its Board of Directors so
determines by a vote of a majority of the members of its entire
Board, at any time during the four business day period <PAGE> commencing
with the first business day after the end of the Pricing Period
(as defined in Section 1.4(e) hereof), if both of the following
conditions are satisfied:
(i) the product of the Average Closing Price
multiplied by the Final Exchange Ratio (as such terms are
defined in Section 1.4(e) hereof) shall be less than $24.00;
and
(ii) (x) the number (the "ICBC Ratio") obtained by
dividing the Average Closing Price by the Starting Price
shall be less than (y) the number obtained by dividing the
Final Index Price by the Initial Index Price (each as
defined below) and subtracting 0.15 from the quotient in
this clause (ii)(y) (such number in this clause (ii)(y)
being referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If the
Company elects to exercise its termination right pursuant to this
Section 9.1(g), it shall give prompt written notice to ICBC
(provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned four business day
period). During the four business day period commencing with the
first business day after its receipt of such notice from the
Company, ICBC shall have the option to increase the consideration
to be received by the holders of Company Common Stock hereunder,
by adjusting the Final Exchange Ratio to equal the lesser of (x)
a number (rounded to the nearest ten-thousandth) obtained by
dividing (A) $24.00 by (B) the Average Closing Price, and (y) a
number (rounded to the nearest ten-thousandth) obtained by
substituting the Adjusted Preliminary Stock Ratio (as defined
below) for the Preliminary Stock Ratio in the definitions
contained in Section 1.4(e) hereof. If ICBC so elects within
such four business day period, it shall give prompt written
notice to the Company of such election and the revised Final
Exchange Ratio, whereupon no termination shall have occurred
pursuant to this Section 9.1(g) and this Agreement shall remain
in effect in accordance with its terms (except as the Final
Exchange Ratio shall have been so modified).
For purposes of this Section 9.1(g), the following terms
shall have the meanings indicated:
"Adjusted Preliminary Stock Ratio" shall mean 1.0 plus the
Index Ratio less the ICBC Ratio, with the net sum being
multiplied by the Preliminary Stock Ratio then in effect as
provided by 1.4(e) hereof.
"Final Index Price" shall mean the average of the Final
Prices for each company comprising the Index Group multiplied by
the appropriate weighting.
"Final Price," with respect to any company belonging to the
Index Group, means the average of the daily closing sales prices
of a share of common stock of such company, as reported on the
consolidated transaction reporting system for the market or
exchange on which such common stock is principally traded, during
the Pricing Period.
<PAGE>
"Index Group" shall mean the 21 financial institutions or
financial institution holding companies listed below, the common
stock of which shall be publicly traded and as to which there
shall not have been a publicly announced proposal since the
Starting Date and before the end of the Pricing Period for any
such company to be acquired. In the event that the common stock
of any such company ceases to be publicly traded or a proposal to
acquire any such company is announced at any time after the
Starting Date and before the end of the Pricing Period, such
company shall be removed from the Index Group, and the weights
(which have been determined based on the number of outstanding
shares of common stock and the market prices of such stock)
attributed to the remaining companies shall be adjusted
proportionately for purposes of determining the Final Index Price
and the Initial Index Price. The 21 financial institutions or
financial institution holding companies and the weights
attributed to them are as follows:
<PAGE>
Company Weighting
Astoria Financial Corp. 4.3%
Charter One Financial 12.9%
Commerce Bancorp Inc. 1.9%
Dime Bancorp Inc. 8.7%
Dime Community 0.9%
Fulton Financial Corp. 4.9%
GreenPoint Financial Corp. 7.5%
HUBCO Inc. 3.2%
JSB Financial Inc. 0.8%
Keystone Financial Inc. 3.9%
M&T Bank Corp. 0.6%
North Fork Bancorp 11.0%
Peoples Heritage Financial Group 6.8%
Queens County Bancorp Inc. 1.7%
Richmond County 2.0%
S&T Bancorp Inc. 2.2%
Sovereign Bancorp Inc. 12.8%
Staten Island Bancorp Inc. 3.4%
UST Corp. 3.3%
Valley National Bancorp 4.3%
Webster Financial Corp. 2.9%
100.0%
<PAGE>
"Initial Index Price" means the weighted average (weighted
in accordance with the factors listed above) of the per share
closing prices of the common stock of each of the companies
comprising the Index Group, as such prices are reported on the
consolidated transactions reporting system for the market or
exchange on which such common stock is principally traded on the
Starting Date.
"Starting Date" shall mean the last trading day immediately
preceding the date of the first public announcement of entry into
this Agreement.
"Starting Price" shall mean the closing price of a share of
ICBC Common Stock on the Nasdaq/NMS (as reported by The Wall
Street Journal or, if not reported therein, by another
authoritative source) on the Starting Date.
If any company belonging to the Index Group or ICBC declares
or effects a stock dividend, reclassification, recapitalization,
split-up, combination, exchange of shares or similar transaction
between and including the Starting Date and the end of the
Pricing Period, the prices for the common stock of such company
or ICBC and the Final Exchange Ratio shall be appropriately
adjusted for the purposes of applying this Section 9.1(g).
9.2 EFFECT OF TERMINATION. In the event of termination of
this Agreement by either ICBC or the Company as provided in
Section 9.1, this Agreement shall forthwith become void and have
no effect except (i) Sections 7.2(b), 9.2, 9.5 and 10.3 shall
survive any termination of this Agreement and (ii) that
notwithstanding anything to the contrary contained in this
Agreement, no party shall be relieved or released from any
liabilities or damages arising out of its willful breach of any
provision of this Agreement.
9.3 AMENDMENT. Subject to compliance with applicable law,
this Agreement may be amended by the parties hereto, by action
taken or authorized by their respective Boards of Directors, at
any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company;
provided, however, that after any approval of the transactions
contemplated by this Agreement by the Company's stockholders,
there may not be, without further approval of such stockholders,
any amendment of this Agreement which reduces the amount or
changes the form of the consideration to be delivered to the
Company stockholders hereunder other than as contemplated by this
Agreement. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
9.4 EXTENSION; WAIVER. At any time prior to the Effective
Time, each of the parties hereto, by action taken or authorized
by its Board of Directors, may, to the extent legally allowed,
(a) extend the time for the performance of any of the obligations
or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any of the agreements or
conditions of the other party contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on
behalf of such party, but such extension or waiver or failure to
insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
9.5 TERMINATION FEE. (a) The Company hereby agrees to
pay ICBC, and ICBC shall be entitled to payment of, a fee (the
"Fee") of $6.5 million upon the occurrence of a Triggering Event
(as defined herein) so long as the Triggering Event occurs prior
to a Fee Termination Event (as defined herein). Such payment
shall be made to ICBC in immediately available funds within five
business days after the occurrence of a Triggering Event. A Fee
Termination Event shall be the first to occur of the following:
(i) the Effective Time, (ii) termination of this Agreement in
accordance with the terms hereof prior to the occurrence of a
Triggering Event (other than a termination of this Agreement by
ICBC pursuant to Sections (9.1(e) or 9.1(f) hereof as a result of
a willful breach of any representation, warranty, covenant or
agreement of the Company) or (iii) 15 months after the
termination of this Agreement by ICBC pursuant to Sections 9.1(e)
or 9.1(f) hereof as a result of a willful breach of any
representation, warranty, covenant or agreement of the Company.
(b) The term "Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) The Company or any Subsidiary thereof, without
having received ICBC's prior written consent, shall have
entered into an agreement to engage in an Acquisition
Transaction (as defined below) with any person (the term
"person" for purposes of this Agreement having the meaning
assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act and the rules and regulations thereunder) other
than ICBC or any ICBC subsidiary, or the Board of Directors
of the Company shall have recommended that the stockholders
of the Company approve or accept any Acquisition Transaction
with any person other than ICBC or any ICBC Subsidiary. For
purposes of this Agreement, "Acquisition Transaction" shall
mean (x) a merger or consolidation, or any similar
transaction, involving the Company or any Company
Subsidiary, (y) a purchase, lease or other acquisition of
all or 10% or more of the assets or deposits of the Company
or any Company Subsidiary or (z) a purchase or other
acquisition (including by way of merger, consolidation,
share exchange or otherwise) or securities representing 15%
or more of the voting power of the Company or any Company
Subsidiary; provided that the term "Acquisition Transaction"
does not include any internal merger or consolidation
involving only the Company and/or Company Subsidiaries;
(ii) Any person (other than ICBC, any ICBC Subsidiary
or Donald M. Karp and/or Harriet M. Alpert), other than in
connection with a transaction to which ICBC has given its
prior written consent, shall have acquired beneficial
ownership or the right to <PAGE> acquire beneficial ownership of
15% or more of the outstanding shares of Company Common
Stock (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section
13(d) of the Exchange Act, and the rules and regulations
thereunder) and subsequent to such acquisition either (A)
the holders of Company Common Stock shall not have approved
this Agreement and the transactions contemplated hereby at
the meeting, or any adjournment thereof, of such
stockholders held for the purpose of voting on this
Agreement (except that the initial Fee in such event shall
be $1.5 million with an additional $5.0 million Fee to be
paid upon the execution by the Company or any Subsidiary
thereof within 15 months following such meeting of an
agreement or letter of intent to engage in an Acquisition
Transaction with any person other than ICBC or an ICBC
Subsidiary), (B) such meeting shall not have been held by
October 31, 1999 or shall have been canceled after a voting
record date for such meeting shall have been established by
the Company, (C) the Board of Directors of the Company shall
have publicly withdrawn or modified, or publicly announced
its intent to withdraw or modify, in any manner adverse to
ICBC, its recommendation that the stockholders of the
Company approve the transactions contemplated by this
Agreement, or (D) the Company shall have breached any
covenant or obligation contained in this Agreement and such
breach would entitle ICBC to terminate this Agreement;
(iii) Any person other than ICBC or any ICBC
Subsidiary, other than in connection with a transaction to
which ICBC has given its prior written consent, shall have
made a bona fide proposal to the Company or its
stockholders, by public announcement or written
communication that is or becomes the subject of public
disclosure, to engage in an Acquisition Transaction
(including, without limitation, any situation in which any
person other than ICBC or any ICBC Subsidiary shall have
commenced (as such term is defined in Rule 14d-2 under the
Exchange Act) a tender offer or shall have filed a
registration statement under the Securities Act with respect
to an exchange offer, to purchase any shares of Company
Common Stock such that, upon consummation of such offer,
such person would own or control 15% or more of the then
outstanding shares of Company Common Stock) and after such
public announcement or public disclosure either (A) the
holders of Company Common Stock shall not have approved this
Agreement and the transactions contemplated hereby at the
meeting, or any adjournment thereof, of such stockholders
held for the purpose of voting on this Agreement (except
that the initial Fee in such event shall be $1.5 million
with an additional $5.0 million Fee to be paid upon the
execution by the Company or any Subsidiary thereof within 15
months following such meeting of an agreement or letter of
intent to engage in an Acquisition Transaction with any
person other than ICBC or an ICBC Subsidiary), (B) such
meeting shall not have been held by October 31, 1999 or
shall have been canceled after a voting record date for such
meeting shall have been established by the Company, (C) the
Board of Directors of the Company shall have publicly
withdrawn or modified, or publicly announced its intent to
withdraw or modify, in any manner adverse to ICBC, its
recommendation that the stockholders of the Company approve
the transactions contemplated by this Agreement, or (D) the
Company shall have breached any covenant or <PAGE> obligation
contained in this Agreement and such breach would entitle
ICBC to terminate this Agreement; or
(iv) after a bona fide proposal is made by any person,
other than ICBC or any ICBC Subsidiary, to the Company to
engage in an Acquisition Transaction, either (A) such
meeting shall not have been held by October 31, 1999 or
shall have been canceled after a voting record date for such
meeting shall have been established by the Company, (B) the
Board of Directors of the Company shall have publicly
withdrawn or modified, or publicly announced its intent to
withdraw or modify, in any manner adverse to ICBC, its
recommendation that the stockholders of the Company approve
the transactions contemplated by this Agreement, or (C) the
Company shall have breached any covenant or obligation
contained in this Agreement and such breach would entitle
ICBC to terminate this Agreement.
(c) The Company shall notify ICBC promptly in writing of
the occurrence of any Triggering Event.
ARTICLE X
GENERAL PROVISIONS
10.1 CLOSING. Subject to the terms and conditions of
this Agreement, the closing of the Merger (the "Closing") will
take place at 10:00 a.m. on the first day which is at least two
and not more than five business days after the satisfaction or
waiver (subject to applicable law) of the latest to occur of the
conditions set forth in Article VIII hereof (other than those
conditions which relate to actions to be taken at the Closing)
(the "Closing Date"), at the offices of ICBC, unless another
time, date or place is agreed to in writing by the parties
hereto; provided, however, that the Closing shall not occur until
after the Election Deadline.
10.2 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. None of the representations, warranties, covenants
and agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time,
except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after the
Effective Time, including, but not limited to, the provisions of
Section 9.5 hereof.
10.3 EXPENSES. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and
expenses; provided, however, that the costs of printing and
mailing the Proxy Statement shall be borne equally by the parties
hereto.
10.4 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation), mailed by
registered or certified mail (return receipt requested) or
delivered by an express courier (with confirmation) <PAGE> to the
parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to ICBC, to:
Independence Community Bank Corp.
195 Montague Street
Brooklyn, NY 11201
Attention: Chief Executive Officer
with a copy to:
Elias, Matz, Tiernan & Herrick L.L.P.
734 Fifteenth Street, N.W., 12th Floor
Washington, DC 20005
Attention: Philip Ross Bevan, Esq.
and
(b) if to the Company, to:
Broad National Bancorporation
905 Broad Street
Newark, NJ 07102
Attention: Chief Executive Officer
with a copy to:
Stinson, Mag & Fizzell P.C.
1201 Walnut Street, Suite 2800
Kansas City, MO 64106
Attention: James W. Allen, Esq.
10.5 INTERPRETATION. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference
shall be to a Section of or Exhibit or Schedule to this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". The phrases "the
date of this Agreement", "the date hereof" and terms of similar
import, unless the context otherwise requires, shall be deemed to
refer to February 1, 1999. No provision of this Agreement shall
be construed to require the Company, ICBC or any of their
respective Subsidiaries or affiliates to take any action that
would violate any applicable law, rule or regulation.
<PAGE>
10.6 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each of the parties and delivered to the other parties,
it being understood that all parties need not sign the same
counterpart.
10.7 ENTIRE AGREEMENT. This Agreement (including the
documents and the instruments referred to herein), together with
the Confidentiality Agreement, constitutes the entire agreement
and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject
matter hereof.
10.8 GOVERNING LAW. This Agreement shall be governed
and construed in accordance with the laws of the State of New
York, without regard to any applicable conflicts of law.
10.9 SEVERABILITY. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
10.10 PUBLICITY. Except as otherwise required by law or
the rules of the Nasdaq/NMS, so long as this Agreement is in
effect, neither ICBC nor the Company shall, or shall permit any
of its Subsidiaries to, issue or cause the publication of any
press release or other public announcement with respect to, or
otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
10.11 ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and
be enforceable by the parties and their respective successors and
assigns. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to
herein) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
<PAGE>
IN WITNESS WHEREOF, ICBC and the Company have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the date first above written.
INDEPENDENCE COMMUNITY BANK CORP.
By: /s/ Charles J. Hamm
Name: Charles J. Hamm
Title: Chairman, President and
Chief Executive Officer
BROAD NATIONAL BANCORPORATION
By: /s/ Donald M. Karp
Name: Donald M. Karp
Title: Chairman and Chief
Executive Officer
EXHIBIT 99.1
PRESS RELEASE
INDEPENDENCE COMMUNITY BANK CORP. AGREES TO ACQUIRE
BROAD NATIONAL BANCORPORATION
Brooklyn, New York February 1, 1999 - Independence Community
Bank Corp. ("Independence") (NASDAQ:ICBC) and Broad National
Bancorporation ("Broad") (NASDAQ:BNBC) jointly announced today
the signing of a definitive agreement pursuant to which
Independence will acquire Broad, a bank holding company
headquartered in Newark, NJ, in a transaction valued at $26.50
per Broad share. Upon completion of the acquisition, Broad's
wholly owned subsidiary, Broad National Bank, will merge into
Independence Community Bank, Independence's wholly owned
subsidiary.
Under the terms of the agreement, which was approved
unanimously by both boards of directors, holders of Broad common
stock will receive cash or shares of Independence common stock
pursuant to an election, proration and allocation procedure
subject to the total consideration being comprised of 50%
Independence common stock and 50% cash. The number of shares of
stock any Broad stockholder receives will be determined based
upon an exchange ratio designed to produce a value of $26.50 per
share when Independence stock has a market value as calculated in
the agreement of between $12.75 and $17.25. To the extent that
the market value of Independence common stock during the pricing
period exceeds $17.25 or is less than $12.75, the per share value
of the consideration to be received by Broad stockholders in the
merger, whether in cash or stock, will increase or decrease,
respectively. The transaction has an aggregate value of
approximately $138 million.
The transaction, through the addition of commercial loans
and low cost deposits, accelerates Independence's strategy of
becoming more like a commercial bank. For the fiscal year ended
March 31, 2001, Independence expects the transaction to be
accretive to GAAP earnings and strongly accretive to cash
earnings, assuming the elimination of approximately 20% of
Broad's non-interest expense base.
Commenting on the transaction, Charles J. Hamm,
Chairman, President and CEO of Independence stated, "I am pleased
to announce Independence's entry into the New Jersey marketplace.
This transaction will allow us to continue our strategy of
leveraging the proceeds from our conversion last March in
contiguous markets with similar demographics. These markets
provide Independence the opportunity to build on its success as
one of New York's largest multi-family lenders. We will be
working closely with Broad's Board of Directors, who we will
retain in a <PAGE> consulting role, and hope to continue to build upon
the strong relationships they have developed within their local
communities over many years."
Donald M. Karp, Chairman and CEO of Broad, commented "We are
extremely pleased to be partnering with Independence. The
transaction will combine two like-minded institutions which are
customer and community focused. Independence shares our
commitment to community involvement and quality customer service.
This partnership allows Broad to enhance shareholder value and
deliver more services to our customers. Independence also looks
forward to providing meaningful banking services in New Jersey's
most populated city, Newark, at a time when that city is
experiencing a great reinvestment and revitalization."
Upon completion of the transaction, Mr. Karp will become a
Vice Chairman of the Board of Independence. John A. Dorman,
President and COO of Broad, will become President and Chief
Operating Officer of the Broad National division of Independence
Community Bank. Broad's current Board of Directors will serve as
a Consulting Board.
The transaction will be accounted for as a purchase and will
not affect Independence's ability to repurchase shares of stock.
Independence intends to repurchase in the open market all the
shares of common stock that will be issued in the transaction.
The transaction is expected to close in the third quarter of
calendar 1999 and is subject to receipt of various regulatory
approvals, approval of Broad's shareholders and certain other
conditions.
The agreement provides for the payment of a termination fee
payable to Independence under certain circumstances. The members
of the Board of Directors, who beneficially owns approximately
30% of Broad, have agreed to vote their shares in favor of the
merger.
Broad, which was chartered as a national bank in 1925, is
headquartered in Newark, NJ, and operates 16 full-service
branches in Essex, Union, Bergen, Hudson and Middlesex Counties,
with two new branches recently approved, as well as an ATM
network in most branches and at Newark's Gateway business complex
at Newark Airport Terminal C.
Independence was originally chartered in 1850 and currently
operates 33 full service branches located in the greater New York
City metropolitan area including 27 branches located in the
boroughs of Brooklyn and Queens.
Merrill Lynch & Co. served as financial advisor to
Independence and Ryan, Beck & Co. served as financial advisor to
Broad.
This press release contains forward looking statements with
respect to the financial condition, results of operations and
business of Independence and Broad and assuming the consummation
of the merger, a combined Independence and Broad, including
statements relating to, among other things: (i) the cost savings
and revenue enhancements and accretion to reported earnings that
will be realized from the merger; and (ii) the restructuring
charges expected to be incurred in connection with the <PAGE> merger.
These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward looking
statements include, among other things, the following
possibilities: (i) expected cost savings from the merger cannot
be fully realized or realized within the expected timeframe; (ii)
revenues following the merger are lower than expected; (iii)
competitive pressure among depository institutions increases
significantly; (iv) costs related to the integration of the
business of Independence and Broad are greater than expected; (v)
changes in the interest rate environment reduces interest
margins; (vi) general economic conditions, either nationally or
in the states in which the combined company will be doing
business, are less favorable than expected; (vii) legislation or
regulatory requirements or changes adversely affect the business
in which the combined company will be engaged; and (viii) changes
may occur in the securities market.
Contact: John B. Zurell
Chief Financial Officer
Independence Community Bank Corp.
718-722-5420
John A. Dorman
President & Chief Operating Officer
Broad National Bancorporation
973-596-2690
